ALTERNATIVE ROUTES TO RECORDING SUCCESS

PERSPECTIVES

The below attached document contains a "Major Label vs. Indie Artist Comparative Budget Analysis" that Artist Manager Larry Scott recently submitted to me. The only Artist Manager that I personally know WITH a bonafied "Business Management" degree, Mr. Scott reveals horrible figures that most artists, whether signed or unsigned, never realize, much to the advantage of the Major label, but to the disadvantage of the artist.

Yet, these figures (based on sales of 250,000 units) are figures that EVERY artist, signed or unsigned, should be staunchly aware of. They are also figures which, upon their review, caused such a migraine headache, I was forced to seek Motrin Extra Strength PM/AM, a product that is not even in existence, except only in the world of Science Fiction.

These figures are representative of amounts that appear in record contracts daily. There’s no need to skew the figures to make the scenario look bad, since real-life examples more than abound. income is underlined, expenses are not.

Advance: $ 250,000

Manager’s cut: $ 37,500 Legal fees: $ 10,000
Recording Budget: $ 150,000 Producer s advance: $ 50,000
Studio fee: $ 52,500
Drum. Amp, Mic and Phase "Doctors": $ 3,000
Recording tape: $ 8,000
Equipment rental: $ 5,000
Cartage and Transportation: $ 5,000
Lodgings while in studio: $ 10,000
Catering: $ 3,000
Mastering: $ 10,000
Tape copies, reference CDs, shipping
tapes, misc. expenses: $ 2,000
Video budget: $ 30,000
Cameras: $ 8,000
Crew: $ 5,000
Processing and transfers: $ 3,000
Off-line: $ 2,000
On-line editing: $ 3,000
Catering: $ 1,000
Stage and construction: $ 3,000
Copies, couriers, transportation: $ 2,000
Director’s fee: $ 3,000
Album Artwork: $ 5,000
Promotional photo shoot and duplication: $ 2,000
Band fund: $ 15,000
New fancy professional drum kit: $ 5,000
New fancy professional guitars [2]: $ 3,000
New fancy professional guitar amp rigs $ 4,000
New fancy potato-shaped bass guitar: $ 1,000
New fancy rack of lights bass amp: $ 1,000
Rehearsal space rental: $ 500
Big blowout party for their friends: $ 500
Tour expense [5 weeks]: $ 50,875
Bus: $ 25,000
Crew [3]: $ 7,500
Food and per diems: $ 7,875
Fuel: $ 3,000
Consumable supplies: $ 3,500
Wardrobe: $ 1,000
Promotion: $ 3,000

Tour gross income: $ 50,000

Agent’s cut: $ 7,500 Manager’s cut: $ 7,500

Merchandising advance: $ 20,000

Manager’s cut: $ 3,000 Lawyer’s fee: $ 1,000

Publishing advance: $ 20,000

Manager’s cut: $ 3,000 Lawyer’s fee: $ 1,000

Record sales: 250,000 @ $16 = $4,000,000
Gross retail revenue Royalty
[13% of 90% of retail]: $ 468,000
Less advance: $ 250,000
Producer’s points [3% less $50,000 adv. $ 70,000
Promotional budget: $ 25,000
Recoupable buyout from previous label: $ 50,000
Gross royalty to Band: $ 73,000
Less Recording and Video Production Cost $ 185,500
Less Deficit from Tour $ -875
Net Income to Band:(deficit) $ -113,375

Record company income:

Record wholesale price $8.65 x 250,000 = $2,162,500 gross income
Artist Royalties: $ 468,000
Manufacturing, packaging and distribution @ $2.00 per record: $ 500,000
Gross profit: $1,194,500

The Balance Sheet: This is how much each player got paid at the end of the game.
Record company: $ 1,194,500
Producer: $ 120,000
Manager: $ 72,225
Studio: $ 52,500
Previous label: $ 50,000
Agent: $ 7,500
Lawyer: $ 12,000
Band member net income each (3): $ - 37,792

The band is now 1/4 of the way through its contract, has made the music industry more than 4 million dollars richer, but is in the hole $112,500 on royalties. The band members have each lost about twice as much as they would have earned working at a 7-11, but they got to ride in a tour bus for a month.

The next album will be about the same, except that the record company will insist they spend more time and money on it. Since the previous one never "recouped," the band will have no leverage, and will oblige.

The next tour will be about the same, except the merchandising advance will have already been paid, and the band, strangely enough, won’t have earned any royalties from their T-shirts yet. Maybe the T-shirt guys have figured out how to count money like record company guys.

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These figures are representative of amounts that reflect what an Independent Band would be looking at if given that they put their own record out with a National promotion campaign, set up their own Publishing Company for their own Royalties, worked with an independent national distributor, and booked a 75-100 city initial tour in support of the album’s release.

Advance: $ -0-
Legal fees: $ 5,000
Recording Budget: $ 12,650
Studio fee: $ 8,000
Recording tape: $ 700
Lodgings while in studio: $ 1,200
Catering: $ 1,500
Mastering: $ 750
Tape copies, reference CDs, shipping
tapes, misc. expenses: $ 500
Video budget: $ 4,700
Crew: $ 1,000
Processing and transfers: $ 2,000
Off-line: $ 500
On-line editing: $ 500
Copies, couriers, transportation: $ 200
Director’s fee: $ 500
Album Artwork: $ 750
Promotional photo shoot and duplication: $ 500
Band fund: $ 15,000
New fancy professional drum kit: $ 5,000
New fancy professional guitars [2]: $ 3,000
New fancy professional guitar amp rigs [2]: $ 4,000
New fancy potato-shaped bass guitar: $ 1,000
New fancy rack of lights bass amp: $ 1,000
Rehearsal space rental: $ 500
Big blowout party for their friends: $ 500
Tour expense [15 weeks]: $ 25,000
Bus: $ 2,000
Crew [3]: $ 7,500
Food and per diems: $ 4,800
Fuel: $ 3,200
Consumable supplies: $ 3,500
Wardrobe: $ 1,000
Promotion: $ 3,000
Tour gross income: $ 300,000

Agent/Promoter’s cut: $ 45,000
Manager’s cut: $ 45,000
Merchandising advance: $ -0-

Band-Owned Record Company Income:

Record sales: 250,000 @ $16 = $4,000,000

Gross retail revenue Royalty
[100% of 90% of retail]: $3,600,000
Less Manager’s Fee: $ 588,000
Producer’s points: $ -0-
Promotional budget: $ 5,000
Recoupable buyout from previous label: $ N/A
Record wholesale price $8.65 x 250,000 = $2,162,500 gross income
Manufacturing, packaging and distribution
@ $1.65 per record: $ 412,500
Gross profit: $1,750,000
Less Recording and Video Production Costs $ 17,350
Plus Net Tour Income $ 185,000

Net Income to Band: $1,324,650

Net Inc. to Band (3-piece band) $ 441,550

The Balance Sheet: This is how much each player got paid at the end of the game.

Manager: $ 588,000
Studio: $ 8,000
Agent: $ 45,000
Lawyer: $ 12,000
Band member net income each (3): $ 441,550

Editor’s Note: More information can be obtained regarding Larry Scott by sending an Email request to mailto:lsmgt@smartbotpro.net or by visiting the web site at

http://www.geocities.com/scottmgt/. Information regarding Kenny Love’s National Booking Agency and Record Promotion is also available by sending an Email request to

mailto:kennylove@smartbotpro.net, or by visiting the web site at http://nba.jumptunes.com.

mailto:kennylove@smartbotpro.net.

Editor’s Note: Kenny Love is President/CEO of Sachja
Productions, a combined national radio promotion and press publicity firm. Sachja Productions accepts unsolicited recordings (compact disc only) in all music genres for review and consideration. Contact the organization at P. O. Box 701231, Dallas, Texas 75370. You can also telephone the company at (972)390-0529, Fax to (209)755-8329, or Email them at mailto:sachja@yahoo.com. Likewise, you can receive complete automated information on the company by sending an Email request to mailto:sachjainfo@smartbotpro.net.