Music artists and their videos (1 Viewer)

[Andrew s wells]

I was just discussing promotion of bands yesterday with a buddy of mine, and he says when a music video is made the band/artist is the one who pays to get it made.. I had always heard it was the record company to help promote the band.. who is right?

 

[BrianB]

AFAIK, And I could be wrong, the general case for mainstream record labels is that as part of the deal given to a band, all costs for video production etc are effectively charged against their royalties.

So yes, the band is effectively paying for the video before they can make any real profit from their album.

Vince would probably know better than me though!

 

[Vince Maskeeper]

If you're talking "major label" material-- Band pays for the video out of their royalties in most cases...

It depends on how the contracts are prepared, some VERY RARE deals consider Videos a promotional expense, under the heading of marketing and thus are not charge as recoupable. Usually these terms are very limited, ie only the first video is covered, and only to a certain budget.

However, the standard is that this is considered a recoupable expense, and is charged against the band's share of record royalties (just like the cost of producing the album in the first place).

Between a modestly budgeted album and a modestly budgeted video, a rock band could be $500,000 in the hole before they sell a single album. Figure the standard is 10% of 90% of retail for royalties (about $1.50 per CD to the artist)- so they will need to sell 333,333 albums to break even with the label (which is way off anyway, as Lawyers and Agents and Managers take their cut off the top-- not to mention taxes- so likely they'll need to go GOLD before they make a dime from the record).

Oh, the life of a "rich" rockstar.

Some other fun stuff:

Some labels will slip "breakage" costs into contacts, a hold over from the days when albums were made from brittle lacquer-- and a decent percentage would break in shipping. Now CD breakage is less than .002%, yet labels will still sometimes charge stupid bands 2-4%!

Some labels will allow for promotionals and distributor bonuses, which the band makes no royalties on: which sounds fair (since the label didn't take money on them, why should the band?) But labels will use these "promos" as perks to the stores, and cheat the band:

So record store A buys 100 copies of CD at wholesale price of $10 each ($1000). Record Store B buys 80 copies of CD at wholesale price of $12.50 each ($1000) and gets 20 copies as a perk.

Both stores get 100 discs and both paid $1000-- but the label only pays royalties on 80 in the second scenario. Because the band makes their cut of RETAIL, the increase in wholesale price does nothing for them, and they basically lose out on 20 CDs worth of royalties.

What's funny is, the label will then charge the band $12.50 per disc against their marketing/promo budget for the 20 discs they had to "give away"

What an interesting business.