Open Warrior

Ever wondered just how much money artists actually actually get from the record companies? Well, that’s a question I’ve always wondered about and I found an answer last night which I would like to share.

I was watching the story of Lisa “Left Eye” Lopes on MTV Base Africa. Left Eye was part of the Grammy winning American girl group TLC, who, despite selling over 10 million albums, filed for bankruptcy in July 1995.

Left Eye was known to be outspoken and when she was asked how a group who had sold over 10 million albums came to declare bankruptcy, she came right out an explained exactly how the music business works when it comes to album sales.

This is a summary of what she said…

For every track on an album there are 100 points, each point represening a shareholder’s interest. At the time that the interview took place, each point equated to about 0.01 USD. TLC had seven points for each track on their album, so, for their album which contained 8 tracks they had 56 (7×8) points or, in other words, TLC made 0.56 USD for each album sold.

If TLC sold 10 000 000 million albums and made 0.56 USD for each album sale, then they made a total of 5.6 million USD…not a bad amount. However, the way the industry works is that the artists have to pay the record companies back for all expenses, including, but not limited to, those incurred during the recording of albums and shooting of music videos. Left Eye estimated that these expenses amounted to around 3 million USD, leaving TLC with 2.6 million USD.

That amount takes another huge cut in the form of taxes which fall into a bracket which is very close to 50%. Thus, total income is around 1.3 million USD. Now, when that is split between the 3 members in the group, each member goes home with just over R400 000 USD.

During the time the interview was conducted, albums probably sold for around 8 USD a copy, resulting in a total revenue of 80 million USD from album sales. From this the artists each take home 400 000 USD.

Does that sound fair to you?