Forget all the East Coast/West Coast hip-hop battles. Forget about Bad Boy Vs. Deathrow. Forget about multi-platinum sales and Brittney's 16.9 Million dollar estate in Malibu. Forget about all the "bling", the half-naked women, the cars, clothes, expensive liquor and excessive partying and let's examine who really gets paid in the media game.
Now that we are in the right mindset, let's look at how the record industry really works:
1. Johnny Hip-Hop is a rapper. ....
2. Johnny desperately wants his music to be heard, so he does free shows, builds a website, records a demo, builds a fan-base, finds a manager and starts shopping his demo to record labels.....
3. Johnny's manager makes him lose 15 lbs and sends him to change his image.....
4. Johnny gets a record deal! Yippie!! Johnny writes all of his music and does his own production.(<--very rare) ....
5. Johnny goes gold (which is also very rare, but he sold 500,000 copies at $11 per unit=5.5 million dollars or so) and his family and friends now think he is a baller. ....
6. Johnny gets his first few checks and realizes he only made less than $60,000, even though his album made millions.....
How did this happen?....
Well, the truth of the matter is that most artists don't make poo as far as money is concerned. Every new artist will enter into a contract where they receive 3 to 12 points per album sold. 1 point equals 1 percent. To get a deal where you are making 12% is rare, first of all. Secondly, your record label would have to look at you and your group as a priority of the record label for you to even get good marketing and media. So you are making 12% of a $11 album, that is close to $.96 for every album sold. So, if you sold 500,000 records and go gold, you would make about $480,000. Now that's sounds pretty good. Half a million is not bad for your first record. But then the money is divided even more.....
So, now the record company begins to recoup on their investments. All the money that they have spent flying the artist and their family/friends around, about 1/2 the video shoot costs, limo rides, etc. After the record company recoups about $100,000 dollars, it forces the artist to pay back the advance that they give them when they initially sign to a record deal, leaving the artist with about $310,000 or so. Then they put half of that money into a reserve account to pay for merchandise that is returned and not sold. So that is $160k or so. But there's still more people to pay. The manager gets 15-20% of the artist's profits so that would be about $62k or so, they pay lawyers about 5% of all the profits from entertainment revenue, and so on and so forth. The artist is the last to get paid. After the artist has invested 3 years worth of work, they pay taxes on the money they have made, and they end up making less than $70,000. If you divide that by 3, you'll get $25,000. That would average about to be $12 per hour. And by today's standards, this is a pretty fair deal.
Imagine the case for those that don't go gold that stay grinding.. this made me think about the Arsonists math. and we were no where close to these #'s. Salute to those keeping hope alive.
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