HERES SOME GOOD INFO I FOUND AT [RAP SHEET.COM]
i know the lazy ass "wana be rappers" aint going to look twice at this info because it requires reading and the use of brain power but to those that are "trues" in the game and are motivated you might wana peep this info out.
THIS IS JUST FOR YOUR INFO.....nothing more or less.
Who is the incredible bonehead who said rappers make mad loot? Wrong, wrong, wrong, wrong, wrong!! Because the fans expect their favorite artists to be crazy paid and livin' large, this puts an incredible amount of pressure on the artists to appear wealthy. And it's not just the fans; I can't tell you how many times I've been out with rappers along with people in the industry, and the industry slobs have expected the artists to pick up the dinner check. I've even seen people cop an attitude if the artist doesn't pay for everything. This is small minded and ignorant because the artist is ALWAYS the last to get paid. Everyone gets their cut first: the label, the manager (15%- 20% of all of the artist's entertainment income), the lawyer (by the hour or 5%-10% of the deal), the accountant (by the hour or 5% of all income), and, of course, the IRS (28% to 50% depending on the tax bracket).
Once an artist releases a record, the pressure is on to portray a successful image to fans, friends, families, and people around the way. People expect the artists to be well dressed, drive an expensive car, etc. Think about it. Don't you expect artists "to look like artists?" Would you admire Jay-Z as much if he drove a busted old 1990 Grand Am instead of that beautiful, brand new, top of the line Bentley?
Sadly, when an artist gets signed to a label deal, especially a rap artist, he or she receives somewhere between 8 and 13 points. What that means is 8% to 13% of the retail sales price, after the record label recoups the money it puts out (the advance, the sample clearances, the producer advances, usually half the cost of any videos, any cash outlays for the artists, etc.). The artist has to sell hella units to make any money back. Here's an example of a relatively fair record deal for a new rap artist with some clout in the industry and a terrific negotiating attorney:
ROYALTY RATE: 12%
We're going to assume that there are 3 artists in the group, and that they split everything equally. We're also going to assume that they produce their own tracks themselves.
Suggested retail list price (cassettes) $10.98
less 15% packaging deduction (usually 20%) =$ 9.33
gets paid on 85% of records sold ("free goods") =$7.93
So the artists' 12% is equal to about 96 cents per record sold. In most deals, the producer's 3% comes out of that 12%, but for the sake of brevity, in this example the group produced the whole album, buying no tracks from outside producers, which is rare.
Let's assume that they are a hit and their record goes Gold (although it is rare that a first record blows up like this). Let's also assume they were a priority at their record label and that their label understood exactly how to market them. So they went Gold, selling 500,000 units according to SoundScan (and due to the inaccuracies in SoundScan tracking at the rap retail level, 500,000 scanned probably means more like 600,000 actually sold).
GOLD RECORD = 500,000 units sold x $ .96 = $480,000. Looks like a nice chunk of loot, huh? Watch this. Now the label recoups what they've spent: independent promotion, 1/2 the video cost, some tour support, all those limo rides, all those out of town trips for the artist and their friends, etc.
$480,000
-$100,000 recoupable stuff (NOT advance)
--------
$380,000
-$ 70,000 advance (recording costs)
--------
$310,000
Still sounds OK? Watch... Now, half of the $380,000 stays "in reserve" (accounting for returned items from retail stores) for 2 to 4 years depending on the length specified in the recording contract. So the $70,000 advance is actually subtracted from $190,000 (the other $190,000 is in reserves for 2 years). Now, there's also the artist's manager, who is entitled to 20% of all of the entertainment income which would be 20% of $310,000, or $62,000. Remember, the artist is the last to get paid, so even the manager gets paid before the artist.
So the artists actually receive $19,333 each for their gold album, and in two years when the reserves are liquidated, IF they've recouped, they will each receive another $63,000. IF they've recouped. Guess who keeps track of all of this accounting? The label. Most contracts are "cross-collateralized," which means if the artist does not recoup on the first album, the money will be paid back out of the second album. Also, if the money is not recouped on the second album, repayment can come out of the "in reserve" funds from the first album, if the funds have not already been liquidated.
Even after the reserves are paid, each artist only actually made 50 cents per unit based on this example. The label made about $2.68 per unit. This example also doesn't include any additional production costs for an outside producer to come in and do a re-mix, and you know how often that happens.
So each artist in this group has received a total of about $82,000. After legal expenses and costs of new clothing to wear on stage while touring, etc, each artist has probably made a total of $75,000 before paying taxes (which the artist is responsible for-- remember Kool Moe Dee?). Let's look at the time line now. Let's assume the artists had no jobs when they started this. They spent 4 months putting their demo tape together and getting the tracks just right. They spent another 6 months to a year getting to know who all of the players are in the rap music industry and shopping their demo tape. After signing to a label, it took another 8 months to make an album and to get through all of the label's bureaucracy. When the first single dropped, the group went into promotion mode and traveled all over promoting the single at radio, retail, concerts, and publications. This was another six months. The record label decided to push three singles off the album so it was another year before they got back into the studio to make album number two. This scenario has been a total of 36 months. Each member of the group made $75,000 for a three year investment of time, which averages out to $25,000 per year. In corporate America, that works out to be $12 per hour (before taxes).
OK, so it's not totally hopeless. Since we're using the fantasy of a relatively fair deal, let's look at publishing from a relatively fair perspective. There are mechanical royalties and performance royalties to figure in. Mechanical royalties are the payments that Congress stipulates labels must pay based on copy right ownership and publishing ownership. These payments have nothing to do with recouping, but everything to do with who owns the publishing. Publishing is where the money is in the music business. Suge Knight claims to have started Death Row Records with the money he made from owning Vanilla Ice's publishing for one song: Ice Ice Baby. It may not be true, but it could be. Avatar Records (home of Black Xuede) is financed through the publishing that the CEO has purchased over the years. Although publishing can be quite cumbersome to understand (just when I think I get it, I read something else that makes me realize how little I know about the subject), but the most basic principle is that when an artist puts pen to paper, or makes a beat, the artist owns the publishing. It's that simple. Whoever creates the words or music owns those words or music. Where it gets confusing is all the different ways to get paid on publishing, all the ways to split publishing with other folks, and all the ways artists get screwed out of their publishing. In the 8 years I've been doing this, I have heard so many times, artists say that they don't care about losing a song or two because they can always make a ton more. That's stupidity. It's undervaluing one's ability. That's like saying it's OK to rob me of my cash, I can go to the ATM machine and get more money. Wrong!! It's never right to rob someone. The "I can make more" defense immediately goes out the window when the creator sees someone else make hundreds of thousands of dollars off a song. Every time!! So why not protect yourself in the door?
Bill Brown at ASCAP breaks it down more simply than anyone I've ever heard. He compares publishing with real estate. When you make a song, you are the owner of that property: the landlord. Sometimes you sell off a piece of the land for money (but you NEVER give away your land, right??) and if someone else wants to use your property, or rent it, they have to pay you rent to use it. I love that analogy. It's so crystal clear!
A copyright is proof of ownership of a song, both lyrics and music. If there is a sample in the music, you are automatically giving up part of the song, at the whim of the person who owns the rights to the original song (not necessarily the original artist). In order to "clear the sample," you send your version of the song to the owner of the original composition or whomever owns the publishing (and to the owner of the master, meaning original record label or whomever now owns the master). Then you negotiate the price with those two owners. Some are set in stone and you get to either agree to their price or to remove the sample. On DJ DMD's last album (22: PA Worldwide on Elektra) he spent close to $100,000 in advances and fees due to the sampling on his album. It came out of his upfront monies (advance) and he bears the burden of paying for it all, even though Elektra released and owns the record. Proof of copyright is easy to obtain by registering your song with the copyright office in Washington DC. .
continue below....
i know the lazy ass "wana be rappers" aint going to look twice at this info because it requires reading and the use of brain power but to those that are "trues" in the game and are motivated you might wana peep this info out.
THIS IS JUST FOR YOUR INFO.....nothing more or less.
Who is the incredible bonehead who said rappers make mad loot? Wrong, wrong, wrong, wrong, wrong!! Because the fans expect their favorite artists to be crazy paid and livin' large, this puts an incredible amount of pressure on the artists to appear wealthy. And it's not just the fans; I can't tell you how many times I've been out with rappers along with people in the industry, and the industry slobs have expected the artists to pick up the dinner check. I've even seen people cop an attitude if the artist doesn't pay for everything. This is small minded and ignorant because the artist is ALWAYS the last to get paid. Everyone gets their cut first: the label, the manager (15%- 20% of all of the artist's entertainment income), the lawyer (by the hour or 5%-10% of the deal), the accountant (by the hour or 5% of all income), and, of course, the IRS (28% to 50% depending on the tax bracket).
Once an artist releases a record, the pressure is on to portray a successful image to fans, friends, families, and people around the way. People expect the artists to be well dressed, drive an expensive car, etc. Think about it. Don't you expect artists "to look like artists?" Would you admire Jay-Z as much if he drove a busted old 1990 Grand Am instead of that beautiful, brand new, top of the line Bentley?
Sadly, when an artist gets signed to a label deal, especially a rap artist, he or she receives somewhere between 8 and 13 points. What that means is 8% to 13% of the retail sales price, after the record label recoups the money it puts out (the advance, the sample clearances, the producer advances, usually half the cost of any videos, any cash outlays for the artists, etc.). The artist has to sell hella units to make any money back. Here's an example of a relatively fair record deal for a new rap artist with some clout in the industry and a terrific negotiating attorney:
ROYALTY RATE: 12%
We're going to assume that there are 3 artists in the group, and that they split everything equally. We're also going to assume that they produce their own tracks themselves.
Suggested retail list price (cassettes) $10.98
less 15% packaging deduction (usually 20%) =$ 9.33
gets paid on 85% of records sold ("free goods") =$7.93
So the artists' 12% is equal to about 96 cents per record sold. In most deals, the producer's 3% comes out of that 12%, but for the sake of brevity, in this example the group produced the whole album, buying no tracks from outside producers, which is rare.
Let's assume that they are a hit and their record goes Gold (although it is rare that a first record blows up like this). Let's also assume they were a priority at their record label and that their label understood exactly how to market them. So they went Gold, selling 500,000 units according to SoundScan (and due to the inaccuracies in SoundScan tracking at the rap retail level, 500,000 scanned probably means more like 600,000 actually sold).
GOLD RECORD = 500,000 units sold x $ .96 = $480,000. Looks like a nice chunk of loot, huh? Watch this. Now the label recoups what they've spent: independent promotion, 1/2 the video cost, some tour support, all those limo rides, all those out of town trips for the artist and their friends, etc.
$480,000
-$100,000 recoupable stuff (NOT advance)
--------
$380,000
-$ 70,000 advance (recording costs)
--------
$310,000
Still sounds OK? Watch... Now, half of the $380,000 stays "in reserve" (accounting for returned items from retail stores) for 2 to 4 years depending on the length specified in the recording contract. So the $70,000 advance is actually subtracted from $190,000 (the other $190,000 is in reserves for 2 years). Now, there's also the artist's manager, who is entitled to 20% of all of the entertainment income which would be 20% of $310,000, or $62,000. Remember, the artist is the last to get paid, so even the manager gets paid before the artist.
So the artists actually receive $19,333 each for their gold album, and in two years when the reserves are liquidated, IF they've recouped, they will each receive another $63,000. IF they've recouped. Guess who keeps track of all of this accounting? The label. Most contracts are "cross-collateralized," which means if the artist does not recoup on the first album, the money will be paid back out of the second album. Also, if the money is not recouped on the second album, repayment can come out of the "in reserve" funds from the first album, if the funds have not already been liquidated.
Even after the reserves are paid, each artist only actually made 50 cents per unit based on this example. The label made about $2.68 per unit. This example also doesn't include any additional production costs for an outside producer to come in and do a re-mix, and you know how often that happens.
So each artist in this group has received a total of about $82,000. After legal expenses and costs of new clothing to wear on stage while touring, etc, each artist has probably made a total of $75,000 before paying taxes (which the artist is responsible for-- remember Kool Moe Dee?). Let's look at the time line now. Let's assume the artists had no jobs when they started this. They spent 4 months putting their demo tape together and getting the tracks just right. They spent another 6 months to a year getting to know who all of the players are in the rap music industry and shopping their demo tape. After signing to a label, it took another 8 months to make an album and to get through all of the label's bureaucracy. When the first single dropped, the group went into promotion mode and traveled all over promoting the single at radio, retail, concerts, and publications. This was another six months. The record label decided to push three singles off the album so it was another year before they got back into the studio to make album number two. This scenario has been a total of 36 months. Each member of the group made $75,000 for a three year investment of time, which averages out to $25,000 per year. In corporate America, that works out to be $12 per hour (before taxes).
OK, so it's not totally hopeless. Since we're using the fantasy of a relatively fair deal, let's look at publishing from a relatively fair perspective. There are mechanical royalties and performance royalties to figure in. Mechanical royalties are the payments that Congress stipulates labels must pay based on copy right ownership and publishing ownership. These payments have nothing to do with recouping, but everything to do with who owns the publishing. Publishing is where the money is in the music business. Suge Knight claims to have started Death Row Records with the money he made from owning Vanilla Ice's publishing for one song: Ice Ice Baby. It may not be true, but it could be. Avatar Records (home of Black Xuede) is financed through the publishing that the CEO has purchased over the years. Although publishing can be quite cumbersome to understand (just when I think I get it, I read something else that makes me realize how little I know about the subject), but the most basic principle is that when an artist puts pen to paper, or makes a beat, the artist owns the publishing. It's that simple. Whoever creates the words or music owns those words or music. Where it gets confusing is all the different ways to get paid on publishing, all the ways to split publishing with other folks, and all the ways artists get screwed out of their publishing. In the 8 years I've been doing this, I have heard so many times, artists say that they don't care about losing a song or two because they can always make a ton more. That's stupidity. It's undervaluing one's ability. That's like saying it's OK to rob me of my cash, I can go to the ATM machine and get more money. Wrong!! It's never right to rob someone. The "I can make more" defense immediately goes out the window when the creator sees someone else make hundreds of thousands of dollars off a song. Every time!! So why not protect yourself in the door?
Bill Brown at ASCAP breaks it down more simply than anyone I've ever heard. He compares publishing with real estate. When you make a song, you are the owner of that property: the landlord. Sometimes you sell off a piece of the land for money (but you NEVER give away your land, right??) and if someone else wants to use your property, or rent it, they have to pay you rent to use it. I love that analogy. It's so crystal clear!
A copyright is proof of ownership of a song, both lyrics and music. If there is a sample in the music, you are automatically giving up part of the song, at the whim of the person who owns the rights to the original song (not necessarily the original artist). In order to "clear the sample," you send your version of the song to the owner of the original composition or whomever owns the publishing (and to the owner of the master, meaning original record label or whomever now owns the master). Then you negotiate the price with those two owners. Some are set in stone and you get to either agree to their price or to remove the sample. On DJ DMD's last album (22: PA Worldwide on Elektra) he spent close to $100,000 in advances and fees due to the sampling on his album. It came out of his upfront monies (advance) and he bears the burden of paying for it all, even though Elektra released and owns the record. Proof of copyright is easy to obtain by registering your song with the copyright office in Washington DC. .
continue below....
