Where your music money goes

An ask Metafilter question that caught my eye: Will my money get to the musician, or all end up with the record label?

Interesting question to me, but maybe not for the reasons the asker intended. While I recognize that fans want the artist to get paid, when a label is involved it's more complicated:

• The artist entered into an agreement with the record label. Even if it's a shitty deal, why are you second guessing a decision that the artist made? Are we assuming that every artist on every label has been tricked?
• The record label likely put up a lot of money to get the record made (which is a loan) -- this is why most of the money goes to the label. Why do they not deserve to make their money back? The record might not exist without them.
• The artist may actually enjoy the support they get from their label. Recording advances, promotion and tour organization are some of the more common benefits. The label's only solid metric for determining the success of an album is sales through their distribution channels. If you take away those sales the label will likely decide the artist is a bad investment and drop them.

Independent artist money breakdown

For independent artists it's simpler of course as we have no record label loans to pay back, but there's still a lot of mystery. I'm asked often where I get the most money from awesome people who want to make sure their dollars go to me. Today in the interest of science and like... money... I did up some charts:

Net amount received by me per album sale. That's the amount that actually goes into my pocket, so bank fees, postage, digital distribution fees, manufacturing and other charges along the way are factored in. The album price per service is listed next to the service name.

Percentage received by me per album sale, based on the same data above.

Neither of these graphs take into account any signup or yearly fees. Amazon is $30 a year and CD Baby (who handles all the other digital distribution for me) is a $35 one-time fee. I'm also not 100% sure I got the iTunes UK album price right and Magnatune lets buyers decide the price from $5-$18 so I used an average of $8 which I think I read somewhere.

Analysis

No big surprise, buying direct from me is the best (for me). Direct digital sales (using my free open source digital store, natch) is the best in profit and percentage as I only pay Paypal fees and a negligible Amazon S3 amount. I make more per sale on CD Baby and iTunes UK than direct CDs from me, but that's only because the unit price is three or four dollars more.

It's interesting how low Magnatune ranks in both charts. Magnatune is a non-exclusive record label that I'm on (and enjoy being on), but unlike other label agreements I referred to in the beginning of this post, I have no debt with them. It's their decision to split the income and bank fees 50% with the artist, which means significantly less money for the artists than most other services.

Conclusion

It's pretty simple. The less middlemen, the more money gets to the artist. The best would be to pirate the album and personally hand the artist a ten dollar bill. That would be as close to 100% as you're going to get.