Posting on behalf of Lance King Nightmare Records
Posted by: Nick ()
Date: November 02, 2006 07:34AM

Hi Nicky,

This is an obvious rant and is the same justification as has been said time in and time out, and is based on the consumers lack of knowledge about what goes into getting them a CD in their hands.

You have a huge chain of businesses in cooperation to put out a CD...thus I will lay out the simple dynamics for you in hopes that you will publish my side of this argument, so that many may understand the whole picture.

Costs to put out an album, we'll do this concervatively to give you an idea of what an album costs to put out. For the sake of giving you an idea of the costs and relative profits/losses, I'll calculate for an album that sells 5000 copies with an average retail cost of $16

RECORDING - ($15,000- $20,000 concervatively) (easily could be $50,000 depending on how much recording experience and or production talents the members have )

ARTWORK - ($1000 - $3000 ) for a an artist, could be more, could be less, you get what you pay for.
These things are usually artist incurred expences these days, a lable then gives them an advance to help them recoup a small portion of these expences.

MASTERING - ($500 - $3000) depending on who you have do it.
This expence is needed, to bring the recording up to normal levels and quality that the consumer expects from an album, it's the final process in recording.

MANUFACTURING
$5000 for a 5000 CD's that are retail ready
$1000 for promotional copies that go to magazines, radio, and distribution outlets

PROMOTION - ADVERTISING BUGETS vary greatly but for the sake of giving an idea to the consumer and ad in one major magazine say for instance "METAL MANIACS" is $1500 for a black and white or $2500 for color....to put that in perspective on the other side of it, is ROLLING STONE that costs $65,000 for a black and white ad and $100,000 for a color ad.

-RADIO PROMOTION $3000 for an 8 week run
-MEDIA MAILINGS and follow up on for reviews $2000
-MAG AD'S - could be huge....depends greatly on the label. $5000 - $150,000
for this demonstration, I've chosen a budget of $5,000 the lowest.


SHIPPING - $3500- Media mailings and shipping of CD's to all distributors and wholesale customers is very large and hard even to calculate, estimated for a average life of a Metal album about

DISTRIBUTION - $3-$4 per CD, if a CD sells 5000 copies that means about $17,500

RETAIL - Yes the stores need to make money too, be it storefronts, chains, independent or mailorder they all need to make at least $3-$4 on each CD they sell to keep their doors open and pay for their costs. So again if 5000 CD's are sold this ads up to another $17,500

Average album cost to put this album out = $82,000

Average sales gross ( $16 retail for 5,000 cd's ) =$80,000

Net profit = -$2000 (negative $2000)


thoughts....

Perhaps your thinking, well 5000 seems low for an album sales....it's not, it's very realistic for POWERMETAL or PROGRESSIVE METAL that sells well actually in the USA our sales are lower than that typically.

I think if you do the math, you can see that in order for a label and a band to realize a profit sales need to be either huge in quanity or higher in prices, one will bare the burden of the loss typically is the artist if they're extravagent in their recording.

Yes there is a paradox there, which way do they go, with the tendencies of consumers not buying as many CD's many have opted to keep their prices higher in order to have the numbers wash.

- I can't give you all the details on digital distribution yet since we've only just entered this this year with our artists, and we are selling a lot more physical product than downloads at this point.
But obviously there are less costs involved, itunes is the high end of payouts they pay the lable/artist $65% of their download revenue. some pay as little as 5%

-----------------------------------------------------------------------------------------------

LABELS need to recoup their investments before they pay out the artist, it's just business, they take a risk, if they do in fact recoup their costs, then they pay the artist a % of that profit.

ARTISTS - the guys that spent their 6 months of time creating the thing you want, most typically loose money on this endeavor because they enjoy doing what they do, but shouldn't they be rewarded for it?
Doesn't music make you happy and make life better? Without it wouldn't life be a bit more flat and boring?


SOME OTHER THINGS TO THINK ABOUT -

-the old forms of distribution to make an album and put it out are quite "COSTLY", new forms of this are pay download sites, bringing the costs down tremendously to a realistic price and value for the customer.

-many customers want the high quality artwork, and the sence of ownership that comes with a CD collection, rather than one that fits in their pocket.

- although an ipod is a wonderful thing and many folks love it, an audiophile that has great hearing and a taste for real fidelity hates mp3's because of the loss of much sound qualities that come with that form of media, even if it's transfered to a CD.

- a band can't tour an album for too long without making any money the expences of traveling across the country or around the world are great for a group of 4-6 musicians.

--------------------------------------------------------------------------------------------

The bottom line is each and every album has it's own life or lifespan if you like, if the consumer doesn't know it exists it doesn't sell anything, yet still costs the same to produce and manufacture.

If the album is reveard by the media and supported, it has the ability to do well.
If the album does nothing it's a loss for the band and the label, most indie labels like ours release the music they love regardless of the limitations of the genre, because were fans of the music, each and every release we let out is a huge gamble to loose money, only a few albums ever show a profit regardless of the perception that the artist or record company is "getting rich" off the Consumer.

All the best,
Lance King

Vocalist and Owner of
NIGHTMARE RECORDS & DISTRIBUTION
7751 Greenwood Drive, St. Paul, MN 55112 U.S.A.

Website: www.Nightmare-Records.com

Myspace's
www.myspace.com/nightmarerecords1
www.myspace.com/pyramaze
www.myspace.com/shiningstar7
www.myspace.com/suspyre
www.myspace.com/pownd
www.myspace.com/warmachine
www.myspace.com/avianband
www.myspace.com/moonlightagony
www.myspace.com/beyondtwilight
www.myspace.com/cloudscapemetal
www.myspace.com/katagoryv
www.myspace.com/prototypeonline
www.myspace.com/sphericuniverseexperience
www.myspace.com/manticorarocks
www.myspace.com/sandalinas
www.myspace.com/eyefear
www.myspace.com/thelanfear
www.myspace.com/orderofnine
www.myspace.com/imagesofeden

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