How to Plan for Making Profits on Your Recording Efforts

It always amazes me as new faces of up and coming talent emerge how despite the fact that every single one wants to make a zillion dollars, almost none know where that money actually comes from. This is uniquely tied to my profession so I want to break this down and show it goes 'round.

There are only a few ways that artists get paid. First, when you make a record every time a copy sells, on average, you or your band get to split that up amongst all of you. This is considered your sales revenue. Now, if you are a member of the band who writes the songs then you get to collect on the second type of payment..Publishing Royalties. This is NOT split up between members of the band, instead only the writers. With publishing, essentially every time your song gets played on a radio station you get paid a small fee. BMI or ASCAP claim to make sample surveys of markets all around the nation which helps them to determine an "average" amount of plays per day your song is getting.

There are a lot of radio stations out there and if you're in heavy rotation across the country that adds up to some serious scratch. You also get paid by these same wonderful folks if it airs on TV, in movies, or if someone else does you song. See? There is a Santa Claus.

The third type of payment is Mechanical Rights. This covers any type of sellable merchandise, T-shirts, hats, dolls you name it. Fortunately this is shared by all the bands members. This is a very lucrative trade. Touring bands for decades have helped pay for there guitar shaped swimming pools with monies collected from the sale of what is now referred to as ..."Merch." The bad news here is that the record companies these days are trying to take a hefty share of that action, and on average if you have a good lawyer when you signed your contract they take fifty percent of all your publishing income....OUCH.

The fourth avenue of monetary compensation is ....Playing live. Yes, everyone knows this one. The good news here is that your record company doesn't take any of it.

Now there is one single thread that weaves all of this together, and most often what is missed. All of these incomes directly trace back to one source.....your record! For example if your management puts a tour together, the size of the venues you play is going to be directly related to the amount of CDs' you sell in that town. If you sell 3000 CDs' in Pittsburgh. You won't be playing a twenty-thousand seat sports arena. Bummer huh! Sorry but that's how it works. If you want to play under the big tops you have to sell big numbers....plain and simple. So again it goes back to your album. Every scrap of income you make will be based off what you do on that small shiny disc. So what would be your first priority if you want to make living playing music?

Rule #: MAKE GREAT RECORDS

Rule #2: Read rule #1 again.

Herein lies the key. Your entire career begins and ends here. Ever wonder why your music heroes are refereed to as "Recording Artists". Above all else that really is your job, that in it's entirety is what you get paid to do, and here is where your focus should begin.

Next issue I'll spend time going into detail about the process, the how and where's. Until then...Rock On.