DBU - Inside Course - Chapter 8 - Spring 2008

DBU - Inside Course - Chapter 8 - Spring 2008 - this...

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The Major Label Deal Chapter 8 From the Record Company’s Point of View
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Where does the money go? Distribution “Vig” 1 st cut goes to the distributor Record comes from its own label cost is “0” to the distributor and distributor/label gets $12 Record comes from “indie” and distributor sells for $12 to retail store, distributor pays “indie” $9.60; charges retail store $12; net gain for distributor = $2.40
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Deductions What happens after the distributor gives the $9.60 to the label? The label tries to keep overhead down in order to increase profits: Aggregation Fees Writers Royalties Writer/Artist Artist not writer of all songs What about sampling? The Bottom Line: ¾ rate for 10 song deal = 68¢, leaving $8.79
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Deductions Continued…. . Artist - 86¢ Producer - 28¢ (The label is now down to $7.65.) Musicians – 8.5¢ (The label is now down to $7.56) Giveaways, Returns, and Special Programs About 18% of all new-artist records sold will be deducted as giveaways;
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Unformatted text preview: this amounts to about $1.80 per record, bringing the bottom line down to $5.76. Packaging & Manufacturing - $4.50 per unit Big Four cost = 40 to $1.00; The Bottom Line: Total distribution vig nets out to $4.76. (See Egghead Box #4, page 106) Imagine Moulding Label Marketing Dept. will assign an image consultant to the artist Why?.to sell more records Remember: What the producer is to the bands music, the image consultant is to the bands look. Sponsors Even after 40+ years of cable TV penetration, the most effective form of marketing is network TV advertising. A 30-second spot on network TV is so costly even major labels, who spend millions on radio spots, dont go near the little screen. So how to stars get the hook-up? Labels partner with corporate giants and get the artists to do endorsement deals....
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DBU - Inside Course - Chapter 8 - Spring 2008 - this...

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