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What's the average Royalty percentage in a record deal?

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What's the average Royalty percentage in a record deal?

Postby DAN » Sat Sep 24, 2011 5:15 pm

Hi guys,

Is there an average percentage figure in a standard recording contract with an artist? I appreciate it may be a 'how long's a piece of string' question - but is there a rough figure.

Or alternatively what would be a good or crap deal?

Or what would a named 'star' get in comparison with an unknown artist?

Cheers in advance,

Dan
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Re: What's the average Royalty percentage in a record deal?

Postby Steve Hill » Sat Sep 24, 2011 8:43 pm

I defer to Narcoman, who will doubtless turn up. But are we talking about the artist's share, or yours?

And who does what (performing/writing/producing etc)?
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Re: What's the average Royalty percentage in a record deal?

Postby narcoman » Sat Sep 24, 2011 9:09 pm

Average first deal? 12% artist royalty. Usually rises throughout a deal so that a second record may rise to 15% etc .. indie deals are a touch higher and on some deals there are milestone bonuses.

Big act? Well - REALLY big acts will be on license deals - in which case 50% or more..... but a big "record deal" would be 18 - 20%.

A crap deal would be 8% but they're not unheard of.

To be honest - whatever you can imagine will have happened at some stage - but 12% is about average for a first deal. Having said that - this is changing very fast and there is no way you could go to a label with a pop act and look for such a deal. They just do not exist.
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Re: What's the average Royalty percentage in a record deal?

Postby DAN » Sun Sep 25, 2011 8:33 am

Thanks Narcoman,

Very helpful!

Dan
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Re: What's the average Royalty percentage in a record deal?

Postby feline1 » Tue Sep 27, 2011 10:29 am

what's the average value of getting someone else to do your homework for you, though?
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Re: What's the average Royalty percentage in a record deal?

Postby Stoney » Tue Sep 27, 2011 11:18 am

Or: what's the average number of thread responses before you get a quip from feline1?
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Re: What's the average Royalty percentage in a record deal?

Postby feline1 » Tue Sep 27, 2011 12:52 pm

5
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Re: What's the average Royalty percentage in a record deal?

Postby SecretSam » Tue Sep 27, 2011 3:03 pm

There is a good and thorough book by a music industry lawyer called Don Passman: "All you need to know about the music business."

It is not a quick read, but may stop you getting stiffed by someone more knowledgeable.

There is a lot more to a record deal than 'royalties,' and the other items on the account are not trivial !

He does give typical percentages and amounts that artists of different statures can achieve.
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Re: What's the average Royalty percentage in a record deal?

Postby narcoman » Tue Sep 27, 2011 3:34 pm

Yup - good book. Be aware that many of his % breakdowns

1) apply to USA (which is VERY different from UK)
2) are long in the tooth - the business has changed somewhat!

BUT - get the book.
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Re: What's the average Royalty percentage in a record deal?

Postby * User requested deletion * » Tue Sep 27, 2011 3:41 pm

SecretSam wrote:There is a good and thorough book by a music industry lawyer called Don Passman: "All you need to know about the music business."

It is not a quick read, but may stop you getting stiffed by someone more knowledgeable.

There is a lot more to a record deal than 'royalties,' and the other items on the account are not trivial !

He does give typical percentages and amounts that artists of different statures can achieve.

Absolutely, and let's not forget the wonderful 'The Musicians Guide' by Marcus Taylor.
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Re: What's the average Royalty percentage in a record deal?

Postby Pinestreet » Tue Sep 27, 2011 4:47 pm

...but you won't earn anything from your percentage anyways cos they will tell you they spent X on the studio, production, video, advertising, promotions, radio bribes, lawyers... and that leaves you in a negative for your first album at least ...
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Re: What's the average Royalty percentage in a record deal?

Postby narcoman » Tue Sep 27, 2011 5:29 pm

You've been listening to Albini!!

It doesn't work like that. SOMETIMES people have signed stupid deals and locked themselves into label owned studios. Most bands get the money in their business account and are contracted to provide the recorded merchandise by a certain date. The mistake (very few) bands make is thinking of the advance as THEIR money. It's not - it's an investment (much like a corporate venture capital investment) to go and make your product. Then their are returns on that investment with a preferential repayment on the investors cash (just like any other investment).

The slightly unfair side is the investor gets paid FIRST and recoup comes exclusively out of the artist share. However - in any other investment deal you'd be expected to be personally liable - so your house is up for grabs !!

Bands don't pay for marketing, bands rarely pay for videos (unless they're stupid), most deals pay for your sign up lawyer (you'd be mad not to - negotiate it as part of the deal), promotions are paid for ONLY out of physical copies.

I signed to a major in the 90s. I recouped within 6 months and bought my house out of it.

So, when most acts sign a record deal with a major (which is impossible these days) - they have a loan/debt that is ONLY payable out of receipts. Show me a venture capitalist deal that works the same way. If you don't recoup - you fold and the debt is wiped away....
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