Breaking down the profits—or lack thereof—for recording artists nowadays
Rolling Stone's article "The New Economics of the Music Industry," published yesterday, begins by using Adele as a test subject for understanding how recording artists make money nowadays. We never do get a firm answer, though, on what the "Rolling In the Deep" singer's haul is. What we do get are some numbers, ranging from ordinary to astonishing, on many dollars artists and labels take from iTunes sales, Spotify plays, Pandora listens, and old-fashioned CD purchases.
"It is beyond complicated," Jeff Price, of distribution company Tune Core, says of the formula to determine who gets paid what for services like Spotify. "It took me literally three months to understand this thing." But the Stone piece does feature a few bottom-line numbers—variable, rough estimates—for what artists on major labels get paid:
- 9 cents for ever song streamed 60 times on services like Spotify, MOG, and Rdio
- 20 cents for every song sold on iTunes for the price of $1.29. (songwriters make 9 cents)
- Record labels haul $1 per 1,000 YouTube plays of a song—including many home-made viral videos that just happen to feature the song, like JK Wedding Entrance Dance, which is set to Chris Brown's "Forever." This can be very lucrative.
- For Internet radio, like Pandora, things get very complicated. But the story indicates that whatever artists make from online radio, it isn't much. Labels and artists split either 25 percent of a radio company's revenue, or $.001 per song—whichever is higher.
- When it comes to a $17.98 CD, the recording artist might get $1.93.
The upshot of the article is that the numbers vary wildly—and independent artists take a way, way bigger percentage of the profits in all of these mediums. That is, if they can get people listening to their music in the first place.