Dear reader, let me hit you with a hypothetical. Let’s say, just for the sake of our little game, that you’re a talented young artist, maybe a rapper or singer-songwriter, who’s been gigging steadily for a few years and is ready to take that next step in their career.
Now, let’s say, just for the sake of argument, that I am the music industry. In my one hand, I hold a contract with a major label, in my other, a keen investor who’s willing to bankroll your activities as a fully independent artist. Which do you choose?
If you went with the first option, assuming that it’s the gilded path to raking in at least $5 million worth of record sales, then may I please offer my sincerest thanks, because you now owe me about $46,350. Oh, and that isn’t counting the huge advance that I gave you, which must also be recouped.
Surprised? Of course you’re not. You’ve read Steve Albini’s The Problem with Music, and you’re more than aware that even artists who sell millions of records end up in the hole for thousands to their record labels. But just how does that process work in the internet age?
As hip-hop industry blog I Am The Connect reports, things don’t seem to be all that different since the renowned producer penned his famous article back in 1993. The only notable change is that now there’s a viable way to work outside of the label system.
And when we say viable, we mean indie artists often end up raking in way more than their major label counterparts. According to I Am The Connect, an indie artist can make up to $79,325 after selling $500,000 worth of music, even after their investor’s sum has been recouped.
How does it all work? Well, in the example used by the industry blog, when a major label artist goes Gold, i.e. sells 500,000 iTunes album downloads at $13.99, the culling process starts with iTunes taking a 30 percent cut off the top, leaving a gross of $9.793 per download.
Staying with iTunes, 500,000 copies at $9.973 a pop is $4,986,500. The artist’s deal is typically around 10 percent, leaving them with $498,650.00. That sum is then used to pay the label back for all the money they invested for the artist to sell that many copies in the first place.
In I Am The Connect‘s example, the costs of things like promotion, radio play, tour support, and video production total $545,000, and that’s assuming your major is being honest and open about their expenses.
Meanwhile, the indie artist who sells one tenth of the music that a major label peer sells is still in a position to make much more money from music sales. Will they be as popular as the major label artist and get to go to all the fancy Grammy and VMA’s parties? No, but popularity doesn’t quite equal coin in the bank.
So, just go indie, right? Well, there’s no such thing as a free lunch. Since you don’t have a major label machine behind you tirelessly promoting your work, the onus is on you to get the work done and make sure your music is out there and being talked about.
“You’ve got to be motivated enough to work daily meeting fans personally, and consistent in following up with those who reach out to you via social media or other means,” writes I Am The Connect. “An outgoing and accessible aspiring artist soon finds success through consistent work and effort.”
