LTC Scans 1,000,000+

[meisinger]

21,522 this week to take it to 1,004,707

[VB for Buffett]

yay!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

[Key Lime Lee]

Gonna be a nice check for Will... and Bill Withers... good for them.

[land_shark3]

Can someone explain to us non-musical biddness people what you mean by scans?

[Mr Play]

SWEET! - A million sold in 14 weeks. Go Jimmy Go!

[meisinger]

Can someone explain to us non-musical biddness people what you mean by scans?

It's the number of register sales reported by retailers who chose to report to Soundscan.

[conched]

Gonna be a nice check for Will... and Bill Withers... good for them.

Just how does that work?

Will all the artists, like Toby and Kenny, Nanci, John Hiatt...all get a nice check? Do they all get the same? Do the performers or the writers of the songs get the most. Bruce Cockburn must be a happy camper.

What happens with Hey Good Lookin $$..does it go to an estate?

Happy for Will! I've been listening to him since I saw him back in 1996 at Laborfest in Luckenbach.

[Key Lime Lee]

Gonna be a nice check for Will... and Bill Withers... good for them.

Just how does that work?

Will all the artists, like Toby and Kenny, Nanci, John Hiatt...all get a nice check? Do they all get the same? Do the performers or the writers of the songs get the most.

Lessee... where to start.

LABELS AND ARTISTS:

In a typical deal, the PROFIT from a record is collected by the record company. They usually have an agreement with the ARTIST to pay him a certain % of the profit, minus recording expenses.

(I'm going to make numbers up - actual numbers may be higher or lower)

So if a label sells 1,000,000 records at $10 a piece (retail then marks them up to $17) and it costs the label $3 a piece to manufacture, there's a profit of $7 per record. Now perhaps the label agrees to give the artist 10% (or "points") of the profit, so the artist is entitled to $.70 per record sold.

So on a million seller, the artist would get $70,000.

But here's the kicker... say it cost the artist $150,000 to record the record. That means that the first $150,000 of the ARTIST'S profit is going to go to the label to "recoup" recording expenses (plus the label is still pocketing the remaining $6.30 profit for itself. The ARTIST won't see any money until after the thing sells 2,000,000 copies.

Even once the artist DOES see the money, chances are his manager got a point on the record, the producer got a couple of points etc so his share is split up amongst other folks.

(And in the final insult, even if the artist DOES repay the label for the costs of recording, the labels consider the album a "work for hire" meaning that the labels own the copyright to the master recordings even if the artist pays them back. And here I thought "work for hire" implied the artist would get paid in exchange for producing the work, not pay to produce someone elses work.)

Plus, if you make a video, go on tour etc all of those costs are recoupable as well, so you could end up never seeing money from record sales.

So obviously, no artist is getting rich off of record sales.

And this is a TYPICAL agreement... where Buffett owns his own label, he's more likely to make $$ off of the record sales because he's an owner.

PERFORMERS:

The performers are generally paid a flat rate for the recording session and are therefore not entitled to any additional royalties. They are paid for the job they do and that's it. It's the same way the guys who build your office building don't get shares of the company - they get paid to build the building.

There are exceptiops of course - if the band is a true collaborative band (say, U2) they may agree to split all profits. And if any of the bandmemebers also wrote or co-wrote songs, they can make money off of that (see below):


SONGWRITERS:

The "rights" to a song are called the "PUBLISHING". By default when I write a song, I am the publisher, unless I have an agreement stating otherwise.

Money from Record Sales:

Record labels are required to pay a standard mechanical royalty rate of 8.5 cents per song to the PUBLISHER of a song per copy sold. So, for example, if Jimmy had recorded my Parrothead song on LTC, Mailboat would have to pay me 8.5 cents per copy sold, or $85,000 for 1,000,000 copies.

Now that assumes I wrote it alone. If I wrote it with Ralph, we'd have to split the 8.5 cents, so $42,500 each. Of course some writers also have agreements with publishing companies who, in exchange for 25% of the profits, will work to get your songs on people's records, in movies etc. So if I had a publisher, I'd have to split the money with them too.

If I had two songs on LTC, I'd get a nice check for $170,000 (8.5 x 2 songs x 1,000,000 copies) which I'd have to split up depending on my publishing and any other writers.

Good money, but no one is getting rich and buying airplanes.

In the case of Hey Good Looking, the money would go to whomever owns the publishing. I'm not sure who that is... it might be the family (you can pass publishing on to your kids) or it may be someone different (Michael Jackson, for example, bought the publishing to the Beatles songs).

Money for Radio Play:

All radio stations pay annual fees to one of three Performing Rights Organizations - companies whose job is to pay songwriters the royalties they are owed from radio play. The three are ASCAP, BMI and SEASAC. All stations pay a set fee (based on market size etc) for a BLANKET LICENSE, meaning they can play any ASCAP song any number of times.

The three PROs then keep track of what songs are played on the radio and, based on a statistical sample, pay artists ROYALTIES for radio play.

This is where writers make BIG, BIG money. If a songwriter is rich, it's because of radio play. When you get a hit song that's getting like 100 rotations a week in most major markets for a few weeks, you're gonna get an awfully fat check.

Of course if people co-wrote the song, they'd have to split the profits. And if they have a publishing deal with a publishing company, then the publishing company would get a share of that as well.

I think that's most of it....

To summarize it all:

Jimmy is making a ton of money off of the record sales, the Coral Reefers already got paid, the songwriters are making okay money from their royalty from record sales, and the songwriters of the tunes that get radio play are getting good money and have the potential for great money if the song takes off.

[sailingagain]

Thanks Lee. I always wondered about that. Very interesting indeed.

[springparrot]

Thanks Lee.
I've always wondered about all that, but never had a clue.

Very interesting.

[springparrot]

SA
GPHMTA

[conched]

Thanks so much for a great reply, Lee!

Thus, indy record outfits like Buffett's Mailboat Records and Jerry Jeff's Tried and True Music.

Terri Hendrix, one of my favorite indy artists has her own Wilory Records. I'm sure she is not getting rich like Jimmy, but has to be a happy person to have total control.

http://www.terrihendrix.com/

I am happy for Will Kimbrough. He is such a fine person.

I guess those guys who wrote Five O'Clock Somewhere are pretty darn happy. I just saw a program on cmt called The Morning After--Country Drinking Songs... It featured Jimmy's and Alan's song at about number 16. The top song was Garf's "Friends In Low Places." It was an excellent show. Catch it if you can.

[Cubbie Bear]

Lee....You are the Professor of Musicology