2008-08-28

STAY INDEPENDENT

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Major label recording contracts best illustrate how even the most well-known and commercially successful music artists lose complete control of music licensing, copyright ownership, and ultimately ALL the profit generated from the sale of the music they produce. The 'artist advance' and other creative accounting practices that define the endless cycle of Recoupable Expenses allow The Big Four (Sony/BMG, Warner, EMI, and Universal) to pocket upwards of 90% of the royalties generated from their artist rosters. While production, marketing, and promotion costs are understandable considered recoupable expenses, these functions are normally performed by salaried employees, retained consultants, or interns and are typically billed back against artist earnings at 100% above actual cost. Most breaking/new artists make less than $.75 per album sold in retail (major label artists are not paid for digital song or album downloads). This is also the rate at which artist advances, production, marketing, and promotion cost are recouped. The Future of Music Coalitions (www.FutureofMusic.org) provides a more detailed overview of major-label artist agreements (http://www.futureofmusic.org/images/FMCcontractcrit.pdf).