How much money does Adam make from his music?

Recently, a link to a very interesting article was posted in the news thread. It was titled, "Where To Buy Music To Get More Cents On The Dollar To The Musician" from NPR Music. www.npr.org/blogs/therecord/2011/02/18/133872018/where-to-buy-music-to-get-the-most-of-your-cash-to-the-musician

This is one of the few articles that actually provides accurate information about music sales and how retail channels work.

It inspired me to put together a summary of how it works for an RCA artist like Adam.

1. CDs and physical music products - RCA produces the product and distributes it to the major retailers who buy directly from RCA like Amazon and Best Buy, jobbers who service major retailers like Walmart and Walgreens, and to third party distributors who service smaller retailers.

The retailer pays the wholesale cost of about $5 to $9 per unit no matter what they sell the CD for. And the retailer retains the margin.

So if Best Buy wants to sell FYE, they buy the albums from RCA for about $8 and they sell it for $13 -- they keep $5 to cover their expenses and make a profit on the deal. If the CDs do not sell they can return them to RCA. (After expenses, Best Buy would be lucky to net $0.40 per unit sold.)

From the NPR article....

Each album has a set wholesale price – somewhere between five and seven dollars.... the album will pay (as with digital sales, the musicians get a portion of that wholesale price that depends on their contract with the label).

"If you have a discounted album in a physical retail setting, generally, not always but generally, the record label has paid for that," Barger says. "Price and positioning, listening stations, weekly circulars — all of these things can be charged back to the record label to position the record better in the store."

Sometimes those discounts trade in higher sales for a lower per-album return to the band. When the National's last album, 2010's High Violet, came out, the band's label paid more for placement than it had with the band's previous album, 2008's Boxer. Nearly a year later, even though sales for High Violet are stronger, Barger says, "At this point in the album cycle, we've actually earned more per album from Boxer than we have from High Violet, due to the spend over time."

2. Digital music -- RCA gets between 60 and 75 cents per digital track and between $5 and $9 per digital album sold in the US on iTunes and Amazon. (Generally, the higher the retail price, the higher the label's share.) Adam and the songwriters/producers get some percentage in royalties based on their contracts. There is no way to know what the royalty share is for digital music.

3. Buy from the Band at a Venue --- the venue will charge a fee for the sale, usually $5 to $7 per unit, plus the label gets the wholesale cost for the CD. So if Adam sells his CD for $20 at a concert venue, the venue gets around $7, RCA gets wholesale costs of about $8, and Adam and his sales agents get the remaining $5 per unit. Of course, Adam does get a royalty on the sale of the CD too. It's a safe bet that this is the best way to get money to an artist.

4. Other revenue sources ---

Streaming media -- royalty rates to the musicians for 2011 is $0.0017 per song. Songwriters also get a royalty that is a percentage of the licensing fees paid by the site in proportion to how often her song is performed and how many people were listening.

Radio airplay --

Licensing --

Ringtones --

Video games --