Once upon a time, in the music industry, artists were producing their own work to their audience which threw more or less money to the most efficient musician…
Then, times have becoming harder and an intermediate appeared and told the artist he could have a bigger audience and earn more money if he accepts to work with him. The intermediate is a label.
When the artist creates a song and wants to sell it, he sells a copyright. The copyright is a right which protects its work from copying, distribution and adaptation. This percentage is set by a music institution which differs in each country.
This right is essential for the artist in order to live!
When an artist sells an album, the label has to buy a copyright to use the songs and then it has a range of fees in order to sell it in a store.
Another element comes into the story: the royalties.
The label gives to the author royalties, which means a percentage of sales, work exploitation and by-products. In general royalties is around 10% of the wholesale price without VAT of a CD. 9% go to the music institution and 81% are left for the label, which has distribution fess (25-30%), general fees (15-23%), promotion and marketing (20%) and record depreciation.
The world is not pink and powerful labels often abuse from royalties and make pressure on artists. This leads to a restrained creativity and the music world innovation cannot be developed as it could be.
The process is not the same in each part of the world but it enables you, Reader, to have an idea of what happens in the music industry.
(source: http://www.monde-diplomatique.fr/2002/02/KENT/)
An interesting breakdown of the royalties. Sounds like the artist doesn't get very much at all...
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