RECORDING ARTIST ROYALTIES
This overview is primarily concerned with some of the major sources of songwriter/publisher earnings, but since many songwriters are also recording artists, a brief mention should be made of the contractual factors that affect income in the recording arena. Artist royalties usually range from 10% to 25% of the suggested retail price for top-line albums, with deductions being made for packaging costs. For example, if a songwriter/artist has an 16% royalty, a 25% packaging deduction, and sells 1 million CDs in the U.S. of a $17 suggested-retail-priced album, the basic calculations would look like this:
$17.00 |
CD Retail Price |
x .25 |
Packaging deduction rate |
$4.25 |
Dollar deduction |
| |
|
$17.00 |
CD Retail Price |
- 4.25 |
Packaging deduction |
$12.75 |
Royalty base |
x .16 |
Royalty rate |
$2.04 |
Artist Royalty |
x 1,000,000 |
Album Sales |
$2,040,000 |
Artist Royalties |
Recording-artist royalties represent an extremely complex area, and the above illustration is included only to present the basic principles involved. But you should know that there are a bunch of additional issues -- including, but not limited to,
* free goods;
* reserve accounts;
* return privileges;
* midline, budget-line, record-club, and foreign reductions;
* 90% sale provisions;
* new-technology rate reductions (which affect CD royalties);
* cut-out and surplus-copy provisions;
* video, tour support, and promotion expenses;
* recording costs;
* advances;
* and controlled composition clauses
- which further affect the monies a songwriter/recording artist receives.
FOREIGN COUNTRY ROYALTIES
Another source of income for most U.S. writers are performance, mechanical and artist royalties generated in foreign countries. Effective and knowledgeable representation (whether it's your performing-rights society, publisher, or other representative) is a necessity for proper collection in this area.
Next: Finally...
Copyright © 2002 by Todd Brabec, Jeffrey Brabec. All Rights Reserved. Note: The figures and comments contained in this article are based upon the authors' experiences over the years with many specific situations. Ranges of fees, as well as comments, do vary based upon individual negotiations and situations. |
