You and your friends are in a band. People think you’re pretty good, which means you’re on your way to fame and fortune, right? Maybe you should try to land a contract with a major record label—or maybe not. Today, many musicians are avoiding the major labels. Here’s why.
Treated Like Royalty?
When you sign a recording contract, most of your money comes from royalties, which means that the record company will give you a certain amount of the price of every song or album you sell. Your earnings are computed based on the wholesale price, which is already very low. So, for instance, a typical band’s earnings might be , where is the total number of albums sold. That’s not much money, considering the fact that you’re the one creating the music. Plus, the record company ultimately also takes a portion of your royalties. They’ll take out the money they spent on the recording studio, a handling fee, and even the cost of CDs they give away for free. Unless you’re one of the nation’s top performers, you won’t make much money off a contract.
Musicians have begun to fight back against these unfair contracts. Today, many use the Internet to connect directly with fans. They finance new albums through crowd-funding campaigns on sites such as Kickstarter or Indiegogo. They give away their music but make money from merchandise, concert tickets, and donations. Many bands make more money this way, even though they have smaller audiences than artists who sign with major labels. Music produced independently from major labels, or "indie" music, is on the rise.
See for yourself: http://www.cnn.com/2010/TECH/web/10/22/okgo.viral.video/index.html
Use the links below to check out music-related Kickstarter projects, learn some marketing tips for indie music, and find out how much musicians actually make from streaming services such as iTunes and Spotify.