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How Much Does it Cost to Produce a Recording? 820

Posted by CowboyNeal
from the dollars-and-sense dept.
An anonymous reader writes "How much does the average new album cost to produce? I have seen this cost estimated between $500,000 and $1,000,000, but some quick figuring does not support a cost this high. According to various sources (Ok, Slashdot stories...), somewhere around 27,000 albums are produced each year and 906.6 million albums are shipped. I would guess that the album retail (about $15 per album) is based on a 100% markup, so that these 906.6 million albums are sold at wholesale for about $7.50 apiece, which means that the revenue from wholesale sales is about $6.8 billion. This means that the actual production cost has to be less than $250,000 per album, otherwise the record industry is losing money. I have left out the cost of actually printing and copying the albums as I think that the average cost is probably less than $0.25 per copy."
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How Much Does it Cost to Produce a Recording?

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  • 100% (Score:5, Interesting)

    by xao gypsie (641755) on Thursday January 23, 2003 @09:35PM (#5148035)
    is based on a 100% markup

    i would guess that the markup is higher than that. it has to be higher than that. most of the cd's i have recently bought were more that $15. it has to be somewhere in the range of 150-250%, especially becuase im sure it ain't getting more expensive to make a cd these days.

    xao
    • Re:100% (Score:5, Insightful)

      by packeteer (566398) <packeteerNO@SPAMsubdimension.com> on Thursday January 23, 2003 @09:42PM (#5148105)
      All of these numbers are insane anyway. I dont have the ability to check the actual numbers but i know from my economics classes that these seem unlikely. This is simply someone guessing about somehting they probably dont know much about.
    • Just a guess (Score:5, Informative)

      by rblancarte (213492) on Thursday January 23, 2003 @09:45PM (#5148117) Homepage
      I have a friend who did some record production a few years back. Overall his cost of production was never more than $3000 or $4000. That all said, he never had to do the recording or the mixing or any of that. Nor was paying the band part of the deal. Still when we are talking real production cost of the CDs themselves, we are talking dirt for that. When you start talking studio time and the time and effort to mix a CD properly, then we are talking a great deal more.

      But still, just looking where I live (Austin, TX) people are able to churn out decent CDs without a huge effort or much money, so when you get right down to it, outside of paying your "talent" we are talking a relatively small figure.

      RonB
      • Re:Just a guess (Score:5, Informative)

        by telecaster (468063) on Thursday January 23, 2003 @10:45PM (#5148448)
        Its not the recording, its the producer.
        Studio time, at a decent studio runs between $300 - $400 an hour (NYC/LA). Some bands tend to keep within the 60 - 120 hours, so your taling about $50K for a marquee studio.
        The producer is the killer. If your a "hot item" new band, typically a record company will bring in a "big name producer" to direct traffic and guide the band. If your a veteran band, say like Aerosmith, you can call your own shots and require that the record company get who you want, regardless of the price. Now heres the kicker. Most producers take some upfront money, and depending on the band, will take some money on the "back end". Much like an actor or director, the record producer makes a point or 2 on sales. This of course is all guided by the record company and basically is very broad in terms, both legal and fiscal.
        Remember, Elvis Costello recorded My Aim is True for under $5,000. But then spent (estimated) over a million dollards on Imperial Bedroom, which was far less of a seller... Nirvana recorded their first album for $800 and it sounded like, Nevermind was MUCH more money as they had a bigtime producer twisting the knobs. So its all relative, and recording costs mean shit.

        Its not the cost its the quality.

        Another good example: Boston's first record (which I still think is one of the best recorded albums) was recorded in Tom Scholtz's basement, he did a few overdubs at a big studio, but for the most part the recording was free! So there ya go.

        • Re:Just a guess (Score:4, Interesting)

          by sql*kitten (1359) on Friday January 24, 2003 @06:58AM (#5149814)
          Its not the recording, its the producer.

          The producer is not a cost in the same way fancy caterers are, rather the money spent on the producer is an investment. For example, you can pretty much guarantee that if Timbaland or the Neptunes or Dre produce, then the CD is going to do well. The producer can make or break an album, the same is not true for many of the other people (costs) involved.
      • by EccentricAnomaly (451326) on Thursday January 23, 2003 @10:50PM (#5148463) Homepage
        Some friends of mine recorded their first album for about $5000 in studio time and it turned out ok, but it wasn't a full length album. They've just finished their second album and it cost them $8000 in studio time and it sounds really good. But you can judge for yourself, they have some mp3s at http://www.breech.net/multimedia.html [breech.net]. Granted, mp3s dont give a full idea of the sound quality... but it _was_ good enough for Dawson's Creek to use a track.
      • Totally off.. (Score:4, Interesting)

        by TibbonZero (571809) <.Tibbon. .at. .gmail.com.> on Thursday January 23, 2003 @11:41PM (#5148738) Homepage Journal
        Umm. Just an example. Butch Vig was paid over 20K to produce nevermind for Nirvana- and that was before they were rolling in the cash. A studio that I am gonna try to get a job at soon starts at 100/hour, and that's just for the engineer...

        A guy I know, that worked with SEVERAL multiplantum bands as a producer or engineer, gets paid upwards of 1000/day at times. Even I as a producer am like 200-300/day.

        That's just for the recording side of it. Many rock albums take weeks, months, or even years to make. The costs aren't that trivial- otherwise I wouldn't be going into it as a profession if all I got was a few grand after working a month on something at all times...

    • by Blaede (266638) on Thursday January 23, 2003 @10:10PM (#5148264)
      The original poster seems to think that a label's only cost in making a record is the actual production costs of the product.

      WRONG.

      Three is also the costs of running the business, i.e. building rental, employees, taxes, operating costs, etc. Only a naive fool would think that the mere cost of recording and pressing a CD is all a label has to worry about. And that $18 that one pays for the product, well not all of it goes to the label.

      Starting a music label is not a licence to print money.
    • by pezpunk (205653) on Thursday January 23, 2003 @11:15PM (#5148596) Homepage
      Total cost to produce our CD (studio time plus mastering, reproduction, artwork, etc) was roughly $2500 initially. the majority of that was for recording. we sold the first 1000 CD's for $5 and easily recouped our investment. the next run of 1000 CD's only cost us $800. They're nice CD's, too -- 2 color printing on the CD itself, 6-page foldout, with full color printing on the booklet and tray card. enough room for lyrics for all *30* songs we put on there.

      so to sum up. we're totally independent, with completely non-bulk numbers, we put out a 30 song CD with nice packaging for $5, and we're making a killing profit-wise. tell me again why Eminem needs to sell his millions of CD's at $18 apeice to make a profit?

      hell, we even have every one of our songs available for download on our website, and we still do fine with CD sales! take that, RIAA. maybe some people can still tell whether an artist is genuine or not.

      • that's easy... (Score:5, Insightful)

        by alienmole (15522) on Thursday January 23, 2003 @11:51PM (#5148789)
        tell me again why Eminem needs to sell his millions of CD's at $18 apeice to make a profit?

        To pay for the use of the global marketing and distribution infrastructure which allows him to sell millions of CDs at $18 apiece.

    • Re:100% (Score:4, Funny)

      by c.emmertfoster (577356) on Friday January 24, 2003 @01:48AM (#5149279) Homepage
      There was this one time, at Troll camp, where I was sleeping with a really hot broad from a shitty local band. [prettyhorses.net]
      Production costs at Pachederm studios were allegedly one grand per day.
  • by ironfroggy (262096) <ironfroggy.gmail@com> on Thursday January 23, 2003 @09:36PM (#5148049) Homepage Journal
    I was just talking to my fiancee about this, trying to convince her of the evils of the RIAA. And, you are very right. It doesn't cost nearly as much as they say.

    My uncle was in a band who self produced 500 CDs. Not much but all accounts, but even that was only 2 bucks a CD and that included studio time, equipement rental, editing, and album cover printing. And, of course, in more bulk the price goes down.
    • by geekee (591277) on Thursday January 23, 2003 @10:16PM (#5148302)
      But did he make a profit? The RIAA needs to mitigate their risk by selling at a higher price since not every band they sign will be successful
    • by jc42 (318812) on Thursday January 23, 2003 @10:19PM (#5148321) Homepage Journal
      500 CDs at $2 each; around $1000. That's consistent with what I've seen. I've been involved in making several CDs in the past few years, and the total costs of studio time, artwork, and making the CDs has ranged from $1000 to $5000. And they were pretty high quality CDs, if I may say so myself. Of course, they're not teen pop, so the recording industry wouldn't be interested. But if you want to make your own CD in the US, that's a reasonable estimate.

      Mass producing them would take a bit more, of course, but if you're making a million copies, there's no way it should cost you even $1 per CD.

      Marketing is something else. If you want to get to the traditional outlets, you have to sell to the marketing oligopoly, or nobody will ever hear you. And, as we well know, this is where they get you.

      But if you're not aiming at the mass pop market, we are reaching the point where you're much better off just ignoring the oligopoly, and doing your own marketing online. A small commercial web site only takes a few thousand bucks for the hardware, and $50-$100 per month for the connection. And some of your time packaging all those CDs and taking them to the PO or UPS or FedEx or wherever.

      Music distribution is turning into a cottage industry. This will have two results. First, the musicians themselves will get most of the money. And second, the marketing and distribution oligarchy will die of starvation.

      They killed the music business half a century ago, so that only a handful of musicians can now make a living at the job. It's time they died, too.

      • by einer (459199) on Thursday January 23, 2003 @11:46PM (#5148764) Journal
        Did you hear that Kevin Bacon has been linked to al Qaeda?

        Great sig. Just out of curiosity I consulted The Oracle of Bacon [oracleofbacon.org]. Unfortunately it shows that Osama Bin Laden has a Bacon rating of infinity. This is actually not very uncommon. About 12 percent of people shown on film cannot be linked to Kevin Bacon through film work (it's actually much harder to find someone with a bacon rating of 4 or more). Osama is one of these. Oddly enough, he has an entry in imdb.com [imdb.com] He was in 2 films, "Afganistan: Land in Crisis (2002)" and "Osama Bin Laden: Behind the Madness (2002)" During the filming of one of these he apparently lost some toes.

        the internet is weird.
    • by Monkelectric (546685) <slashdot AT monkelectric DOT com> on Thursday January 23, 2003 @11:12PM (#5148577)
      I have been on two (small run) albums, recorded in professional studios and am producing/recording my own ...

      The real cost isn't equipment, its labor. Equipment is essentially a 1 time investment. I'm producing my album with about 30k of equipment and it will sound as good as a pro studio, however a real studio will have $100k - nearly infinite dollar ammount of equipment... but since I know how to use the equipment LABOR IS FREE. Also alot of the cost of equipment is the building. Real studios have special buildings with modified heating and cooling systems, special wiring ducts, and the rooms are dressed in sonics to reduce sound reflections.

      I have no doubt that albums like britney spears cost 1mil to produce. Assuming the studio has all the equipment you need... You need to hire session musicians (drums, bass, keyboard, backup vocalists, string players, guitar). Then you need support staff like vocal coaches, multiple engineers, multiple songwriters, etc etc. All of these people make 25 - 100$ hour, plus the 50 - 500$ you are paying per hour just to be in the studio (the companies may own their own studios, I dont know. They may also have session musicians on salary, thats the way I would do it).

      Now a band that comes to a studio with its songs written and well rehearsed, doesn't need anything but a few engineers and THAT can be done on the cheap. Real professionals can do an album for nothing. I've seen all star jazz bands walk into a studio, lay down each song in one take, and be done before lunch. Couple days mixing and the thing is done. But those are guys who've been playing for 35 years.

  • by thedbp (443047) on Thursday January 23, 2003 @09:37PM (#5148051)
    with large ATA hard drives and digital interfaces for various applications to drive real-world mixers and soundboards becoming cheaper and cheaper, the actual cost of recording, in a real sense is very minimal. A whole setup can be had for $20,000.

    Then there's studio time. And paying the engineers, artists, producer, and the entourages of all the above mentioned people. Plus food, limos, champagne, jimmy hats, mini hot dogs, whipped cream, broken instruments, bail, hush money, drugs, alcohol, cigarettes, and there's about $980,000.

    So you can see how these things add up.
    • by wideBlueSkies (618979) on Thursday January 23, 2003 @09:44PM (#5148115) Journal
      Don't forget the whores, and lawyers.

      Or is that whores/lawyers?

    • by delta407 (518868) <slashdot@ler f j hax.com> on Thursday January 23, 2003 @09:46PM (#5148132) Homepage
      [It's getting cheaper] with large ATA hard drives and digital interfaces for various applications to drive real-world mixers and soundboards becoming cheaper and cheaper, the actual cost of recording, in a real sense is very minimal. A whole setup can be had for $20,000.
      Quite true. I recently did recording (and am currently doing mastering) for a bunch of high school students in a church band -- the recording interface [midiman.net] was $600. The church already had a suitable sound board, the drummer had a suitable set of drum mics, the guitar player had enough cables to strangle an elephant, and someone had a basement we could use.

      In all, we spent $600, but the total equipment value came out to somewhere around $4,000. The production process (250 copies) will run about $2.50 per CD (with labels and everything), and the final CDs -- covering all production investments and the price to produce the final copies -- will be sold for $10 each. Oh, and it sounds halfway decent [visi.com], even after only half an hour of tweaking earlier today.
      • by Zeinfeld (263942) on Thursday January 23, 2003 @10:19PM (#5148316) Homepage
        In all, we spent $600, but the total equipment value came out to somewhere around $4,000

        The real costs of any effort of that type are going to be people costs. So it costs $600 for a recording for a chuch band, maybe $1000 if you had to hire more of the equipment.

        On the other hand a top act such as U2 or the like are likely to want to spend several days in a fancy studio with a full crew of sound technicians, personal assistants, caterers and the like. It is pretty easy to end up spending $10K a day that way - even if you own the actual studio and all the equipment.

        After that there is the cost of making music videos and the payolla required to get airplay. Those costs have gone up quite a lot since Queen spent $500 to make the Bohemian Rhasphody video.

        Clearly the industry can't spend $500K+ on the low budget albums that form the bulk of new releases. But even so few of those low budget efforts are going to have a chance to get anywhere near the top 40.

    • by m00nun1t (588082) on Thursday January 23, 2003 @11:05PM (#5148547) Homepage
      I see comments like this sometimes on /. and it is a classic case of the /. crowd showing their ignorance over something they know little about. As someone who spent 7 years as a professional sound engineer (I ended up doing a lot of digital audio and found the computers more interesting than the sound...), there is a lot of rubbish spoken.

      Yes, you absolutely can get a set up for $20,000, but you get what you pay for. There are some things you can skimp on, but some things just simply cost big money and cutting corners directly impacts the sounds quality. For example, you simply can't buy a decent sounding studio vocal microphone for less than $1000, and you should be spending more like $3000 to get something that sounds nice - you can spend more if you want. A decent analog compressor will set you back over $1000, and while digital compression has its place (I'm definitely no luddite when it comes to audio technology) there are still times when an analog compressor is best for a number of reasons.

      There is monitors and amps. The sky is the limit here, but I wouldn't mix a commercial album on anything costing less than $5000 (yes, I do use near fields most of the time, but still need the big speakers for reference).

      Then you get to room treatment... oh boy. This one is HUGE. If you want a great sounding drum kit, you need in rough order:

      • A great drummer
      • A great sounding drum kit
      • A great sounding room
      • A bunch of nice mics (5 - 10 mics at $1000+ each)
      • A bunch of good quality inputs for those mics
      • Then something to mix it with, record it on, etc - that's almost a detail
      A great sounding drum room with decent sound proofing can easily cost tens of thousands without going over the top. Let's not even mention the acoustics in the control room. On top of all that you need a skilled, experienced engineer who understands how all the above interact - the human, the acoustics and the electronics are all part of a complex synergistic relationship that feed off each other (yeah, it sounds like hippy crap, but it's true - work a few years in a studio and you'll know what I mean).

      This is just getting started, I could go on. So for those who think all you need is a beefy PC/Mac, a copy of Cubase and a nice sound card, then you need to get out of hobby land and work on some real records. BTW, I'm certainly not saying that you don't use those things, I'm generally a fan of computer based recording, but they are just a small part of a big picture.

      One caveat: for electronica, anything goes. There are no rules and no real concept of low end as far as budget goes. I'm mostly talking about music with live musicians, which there will always be a demand for.

      • by thedbp (443047) on Thursday January 23, 2003 @11:30PM (#5148681)
        your way is a a qauint fad of the past. all will be electronic. all will be assimilated. you too shall reap the digital harvest and succumb to the rhythm of the hi-hat.
      • by ruiner13 (527499)
        ... and that's all great, but the really useful figure would also include how many albums you could produce after purchasing all these components. I'm guessing all these charges wouldn't be billed to each client that comes in your door. Yes, the initial price is high, but if the equipment is as good as you claim it to be, and based on the price, i'd sure hope it owuld be able to go for at least a couple of years before obsolescence. So, all these fantastic figures are nice, but until you include how many albums/songs/etc you get per setup, it's all pretty meaningless, unless of course you have THE bitchiest clients in the world that require you to purchase their own hardware each time. And i'd sure hope that any band worth their sweat weight would at least have their own instruments and drummer.
      • by jelle (14827) on Friday January 24, 2003 @12:12AM (#5148899) Homepage
        You are probably right for the quality level of your work. However, music of a lower recording/studio quality will still be liked and loved by a lot of people. Just go to a large city with lots of live music, they play in bars on often simple setups, and the people love it.

        The current oligopoly setup has pretty successfully supressed that large group of non top-studio-recorded musical performances and the listeners were forced into 'consumer' positions where they were only presented with the 'creme brulee' recordings so to say. But often a grilled steak or beer with wings will taste very well indeed.

        Get prepared for a market with lots of music out there performed in studios with, for your standards, sub-standard equipment, professionalism and sound quality. And also be prepared that a lot of listeners will enjoy listening to it. That doesn't mean there won't be any demand left for quality work and equipment. It just means that the artists and fans that aren't big, fast, or rich enough for the good stuff still get to play their game without being blocked out by the 'market' situation. It will probably actually result in more work for you because there will be more bands out there that start small and cheap and that later will be looking into something better. More music will enter the 'funnel', leading to a larger number of bands requiring hours in the high quality studios.

        A renaissance for music. It's coming.

      • by mgkimsal2 (200677)
        Being the big Beatles fan that I am, I have to wonder how they were able to get such good sounds (which often still sound fresh nearly 40 years later) without all that top of the line equipment. I'm not suggesting that they had crap 2nd hand stuff, but certainly much of the equipment at Abbey Road wasn't state of the art even for the times - that became a point of contention in the late 60s (using 4 track when others had 8 track, etc).
    • has a sony 24 track digital studio! they were featured in time for a story on drugs in high school. but, since the parents in this high rent zip code subsidize the drug usage, the recordings are much cheaper to produce!
  • Average? (Score:5, Funny)

    by Daleks (226923) on Thursday January 23, 2003 @09:37PM (#5148055)
    While your numbers may hold true for the average, it obviously takes less money for the likes of William Shatner [amazon.com] or David Hasselhoff [amazon.com] to produce an album than U2.
    • Re:Average? (Score:3, Funny)

      by ez76 (322080)
      While your numbers may hold true for the average, it obviously takes less money for the likes of William Shatner or David Hasselhoff to produce an album than U2.
      ... and standard deviation was born.
    • Re:Average? (Score:5, Funny)

      by davinciII (469750) on Thursday January 23, 2003 @09:52PM (#5148176)
      it obviously takes less money for the likes of William Shatner [amazon.com] or David Hasselhoff [amazon.com] to produce an album

      Seriously? Do you know how much money it costs to make a David Hasselhoff record even remotely listenable?

  • by Blackbox42 (188299) on Thursday January 23, 2003 @09:38PM (#5148064)
    It all depends on who you are and how much you are expected to return. Average big name record companies spend about 100,000 to produce and advertise for a new group. Smaller companies can do the same from anywhere from 5,000 to 15,000. The advertising for an album cost more than the production and has a greater return on the investment.
  • Not that much (Score:5, Informative)

    by spankalee (598232) on Thursday January 23, 2003 @09:39PM (#5148070)
    Maybe the big name spend that much becuase they get costly producers and waste studio time getting all coked up, but my band was able to record 3 albums for an average of $2000 each.

    Reproduction costs are higher though. Especially for nice packaging, like cardboard cases or multipage inserts. We got a great deal and it was still $1 per CD.

    For $250,000 you could build your own studio and still hire a good engineer and producer... and get 5000 copies made. Markup is way more than 100%, I believe most of it goes into marketing and "artist development"
    • Re:Not that much (Score:3, Interesting)

      by geekee (591277)
      And how much was your promotional budget, and how many albums did you sell. Promotion is where all the money goes.
      • Re:Not that much (Score:4, Informative)

        by The_dev0 (520916) <hookerbot5000@@@gmail...com> on Thursday January 23, 2003 @10:58PM (#5148502) Homepage Journal
        Promotion? I don't think that's such a big thing as it used to be, considering how easy it is to use the internet. The band i'm involved with Against [against-hc.com] did our own recording, mastering and pressing of the CD's. We print our own shirts, stickers, flyers and other merchandise, and rely heavily on two important things for promotion.

        1) The Internet. It costs very little to create a web presence, more than just a band website. Making some of your tracks available for download off MP3.com and the like, having fans of the band talk you up in the circles that listen to that sort of music, swapping advertising space with other productions with a similar clientele, and generally getting your name out there. It doesn't take much, and if you are a half decent band you will create a snowball effect.

        2) GET OUT THERE!! play gigs, and plenty of 'em. Play with bands that wouldn't usually play together to try and get some crossover fans. Play underage gigs as well as licensed, because grommets grow up to influence the music industry too. Hook up multiple-bill gigs so the divided costs are less between the bands while giving the punter more bang for their buck. After ripping up a few scorcher gigs, we've attracted the attention of localised media, ie: fanzines, interviews in gig guides, and the local (and bigger) music press. Yeah, I know this sort of promotion is not on the same level as U2 would use, but every little bit helps and the money saved by getting awareness through the free media can then be used to try and break new markets. As my old grandpa used to say, a dollar saved is a dollar earned. If you are prepared to put in the hard yards, you can do quite a lot of promotion with very little cost involved at all, if any.

  • by inepom01 (525367) <inepom01 AT hotmail DOT com> on Thursday January 23, 2003 @09:39PM (#5148074)
    It's not NEARLY that much. The $15 price is not a 50% markup from what it costs to produce. There are distribution costs that you are forgetting. Making a CD is really not that expensive. It all depends on what kind of music and how much of their own recording the band does: you can record the whole thing in your apartment and just go to the studio to mix, which will lower your cost considerably. You can have your CD for about $4,000 probably. Why do your CDs cost $15? you are paying for the PR and everything... There's a whole pyramid of people between you and the artist. Also, 90% of bands never really make money so the remaining 10%, whose CDs you actually buy, have their CDs' prices jacked up.

    Also, everything is getting cheaper. Things like mixing are moving towards being done on a less and less expensive PC. A Mac with ProTools can do a LOT these days.

  • Faulty premise (Score:5, Insightful)

    by Golias (176380) on Thursday January 23, 2003 @09:40PM (#5148077)
    You are operating from a faulty premise, which is that the record label must recover their production costs from sales.

    The truth is that most of the production costs are paid by the artist. With a new artist, the label fronts the money to produce the album, to be paid back out of artist royalties.

    One of the big complaints of artists, which several prominent performers have pointed out before, is that they can almost never repay all of these costs from their first album, unless they are one of those rare acts which goes platinum with their debut. Most acts are then pressured to rush a second album, as cheaply as possible, to increase their revenue to pay off the production costs of the first album and get them into the black. (Hence, all those infamous "sophomore slump" albums.)

    In other businesses, this practice is called "loan sharking", but it's the way the record industry has worked for decades, and there's no sign of stopping as long as this business model continues to work.

    • Re:Faulty premise (Score:5, Informative)

      by revividus (643168) <phil.crissman@gm ... om minus painter> on Thursday January 23, 2003 @09:59PM (#5148206) Homepage
      That's right, I was hoping somebody would point that out. A good description of this process has been made by Steve Albini, in Some of your friends are already this fscked [indiecentre.com].
    • Faulty premise # 2 (Score:5, Insightful)

      by Erris (531066) on Thursday January 23, 2003 @10:00PM (#5148210) Homepage Journal
      Don't confuse what someone spends doing something with the cost of getting something done. Money made by music lables funds things that have little to do with making music. "Promotion" is a vauge cost term added to contracts that can be anything and certianly includes Rosen's golden parachute. Courtney Love pointed out in her "numbers" essay. If a band makes any money at all, suddenly "promotion" costs come out of the woodwork. The Artist rarely makes more than $40k/year after expenses are taken out, while the publisher pockets millions.

      The actual costs seem to be what this article has in mind. Most people know what it costs to press a CD and wonder how that $0.25 turns into $20. We also imagine that musicians already own their instruments and have something to record. As you seem to know so much about what's going on, could you detail some actual recording costs for us? Like, what does it cost to rent a studio? Where do we get this outrageous half a million dollar figure from?

    • Re:Faulty premise (Score:3, Insightful)

      by /dev/trash (182850)
      as long as bands just sign away, and not read the fine print it will work.
    • Re:Faulty premise (Score:4, Insightful)

      by geekee (591277) on Thursday January 23, 2003 @10:29PM (#5148383)
      In business, the person taking the moentary risk usually ends up with the lion's share of the profit. That is why the music producers make most of the money. If an artist's debut fails, they'll declare bankruptcy and the music producer will be stick paying the bill. When a project is successful, however, the person who put up the money is usually the 1st to get money back. That is why the artist needs to pay the studio cost if successful. The investor needs a return on his investment to make it worth the risk. Everybody keeps claiming artists are being ripped off. But unknown artists will give their left arm for a recording contract that is a supposed rip-off. Why? Because it isn't a rip-off. Unknown artists want someone to take a risk on them. If they're successful, they bitch and moan about the person taking the risk, because they forget that without the risk he took, they'd still be nowhere.
  • by NanoGator (522640) on Thursday January 23, 2003 @09:40PM (#5148084) Homepage Journal
    ... bailing the artists out of jail.

    Hmm, this comment'd be funnier if we were talking about the Portland Trailblazers.
  • Cost (Score:3, Interesting)

    by Digypro (560571) on Thursday January 23, 2003 @09:40PM (#5148088) Homepage
    The cost is similar to the cost to produce a movie..the studios and equipment have already been bought and paid for, so the conglomerates can bill themselves whatever ridiculous amount they feel is neccesary, so they can then steal the "cost" from the artist when their record sells. I don't know how a why this system is still around, but I don't see it changing anytime soon. The actual cost to record and album can be just about anything, you can make "professional" quality sond on just about any PC with a variety of software..and many "artists" do just that, especially dance artists. Just about every beat you hear in a hip hop song was or can be made on a sampler that cost less than $3,000 USD. The Wu-Tang clan is a prime example, they produced their first album for next to nothing!
    • Re:Cost (Score:3, Insightful)

      by The_Rook (136658)
      i don't think making a recording is as cheap as a lot of readers here think. that cheap pc and cheap gear some talk about is fine, if you want to make a cheap shitty sounding recording.

      a straight recording of a band in a studio can record an hour of music in a recording session or two for less than 5 grand. but most pop albums include lots of layering and pre- and post-processing. getting a top talented producer and engineer to accomplish this isn't cheap (hey, the producr's got to eat too). plus there are back up singers and musicians that have to be paid too. but it's still not nearly as expensive as the record companies say it is.

      the couple hundred grand fronted to a band by the record company is supposed to be used to make the recording, and is about right for making a recording with decent production values (no comment about the quality of the music, but the sound should be decent). all the other expenses the record companies attrribute to promotion and distribution are clearly grossly inflated. for example, record contracts make provisions for 'breakage', a leftover from the days of 78 rpm records.

      and the record companies have little or no incentive to keep costs down. vivendi universal owns a record company that spends money on promotion. vivendi universal also owns mtv. with the band paying the costs of promoting on mtv out of their royalties, and all the promotion money coming back to vivendi universal anyway, why should the comapny do anything to keep the promotional costs down? note that the record companies have no fiduciary responsibility to the bands they sign and carefully control how their books can be audited in the contracts they force upon the bands.
  • Depends... (Score:5, Insightful)

    by cornjchob (514035) <thisiswherejunkgoes@gmail.com> on Thursday January 23, 2003 @09:42PM (#5148099)
    the cost of an album depends considerably on what you're trying to do, and who you are. Assuming you're in a small band (like myself), an album will usually cost maybe $600 just to record and master, and then another $2000 for a good amount of copies in cd and tape. This doesn't add a lot of frills, especially in the recording process; not much can be done on a budget such as that, like studio musicians and really nice effects and what not. But then again, you could get a bunch of buddies to do anything special on your album, and that'll usually work. Or, you could do it with less quality for even less money, or record it at home. But for some professionalism, thats the way to go, and it'll usually run between $2000 to $3000.

    For big business music, however, several thousand dollars are spent. The average is raised a lot due to how many effects and how much processing goes into making pop music. Britney doesn't hit that note? Touch it up with several thousand dollars worth of software (if you're legit ;) and special hardware and a technician that's expensive as hell. Plus, with all the processing, even more goes into it. Producers at that level are also hella expensive, further jacking up the price. And studio musicians are expensive as hell.

    But the bottom line here is it depends on what you meant: Major recordings or a bunch of bumblefucks like myself on a budget.
  • by z-kungfu (255628) on Thursday January 23, 2003 @09:45PM (#5148116)
    ...back in the 80's when CDs 1st appeared they were more expensive than albume, even though they cost LESS to produce. The record industry said once the cost of tooling was paid for cost would go down, they lied... Even in a pro studio you can record an album for way less than $100k. The rest of the supposed cost goes to marketing and promotion, which is a bunch of BS. The record companies are bigger crooks than Enron... I see 1000 CDs regularly for just over $1k w/ packaging....
  • The biggests cost... (Score:5, Interesting)

    by Faeton (522316) on Thursday January 23, 2003 @09:45PM (#5148121) Homepage Journal
    is never the printing, S&H, recording or any of that. It's *always* the marketing (I'm including music videos). Companies spend millions pushing their music onto MTV, MuchMusic (Canadian variant) and radio stations.

    A music video, a self-contained commercial for the album costs a LOT of money ($100k up to $500k), without actually bringing any money in by itself (except for the growing trend of musicvid DVD's).

    Everytime you watch a music video or listen to the radio, that's marketing money spent just to get you to buy the album. For people that want to go big-time, you gotta shell out the big-bucks. That $20 you pay for the CD pays for pretty much every method that got you aware of the CD in the first place. Except for word-of-mouth, which to marketers, is priceless (which it is, since it's free).

  • by ryanw (131814) on Thursday January 23, 2003 @09:45PM (#5148122)
    Standard recording costs range between $40 on up to $200 or $300 an hour depending. But an average joe could record at a high quality studio for about $60 an hour. Depending on how good the band is you could do a whole album in one week at 12 hours a day. Thats $3,600.00 in recording costs. About another week to mix the album at 12 hours a day. Another $3,600.00.

    Mastering of an album costs about $4000.00 at Gateway Mastering. Thats the best place in the world. CD Duplication for color inserts and other things it's about $1.00 each.

    So it's like $12000.00 for recording, mixing and mastering and another $8000.00 for 8,000 cd's. So now we're upto $20,000.

    But now you gotta' pay the "independant promoter" companies (which are subsiderary companies to the radio stations) lots of money to get it played on the radio. Thats an extra $10k.

    So a total of $30,000 for a good band to pound out a great CD.
    • So not counting promos, it is $2-$3 per CD for small to medium size runs. That's exactly the range everyone else in this thread is giving, meaning the markup on a typical $20 CD is around 10X, or 1000%. I wonder what other industry has such enormous profit margins.
  • by NanoGator (522640) on Thursday January 23, 2003 @09:47PM (#5148134) Homepage Journal
    I don't really care how much the markup is on a CD. That's not an issue with me. If it costs them a penny a CD, and they sell it for $15, that doesn't bother me one bit. The truth of the matter is that they're charging what people are willing to pay, not based on what they actually cost to make.

    What does bother me is their reluctance to satisfy me as a customer. If an album sucks, I want a refund. Forget it, open it == bought it. They don't even want me sampling the music to alleviate their no returns policy. The way I see it, if they're going to charge a premium for this crap, shouldn't I become a happy customer?

    So yeah, they can charge what they want as long as I find the price reasonable, but I demand better customer satisfaction if they're getting such a ridiculous markup on it.
  • $25,000 (Score:3, Interesting)

    by Jason1729 (561790) on Thursday January 23, 2003 @09:50PM (#5148158)
    $5,000/hour to rent studio time * 4 hours, and another $5,000 for post production work.

    Jason
    ProfQuotes [profquotes.com]
  • Costs can be huge. (Score:5, Informative)

    by saddino (183491) on Thursday January 23, 2003 @09:50PM (#5148162)
    My band [yumahouse.com] released our second CD (right before getting signed alas) independently and the seven songs on it (about 30 minutes worth) cost us about $15K of studio time. Note that this was a no-name studio, with a no-name engineer, and self-produced. We've known small bands that have been signed to semi-majors, and even a somewhat-known producer, engineers and studio time can easily cost $250K. I imagine top quality studios, engineers and producers cost much more.

    And, if the label thinks you might actually move some units, they'll be paying expenses, per diems, touring costs and marketing. Believe me, that can cost a lot of $. Fact is, it costs a lot of money to put together a "best-seller."

    FYI, signed bands actually pay for the recording costs (the money is "fronted" by your label) so the studio only pays if the album doesn't break even (most albums actually) -- and if the band never generates sales to cover it, the label will eventually eat the cost, but even in those cases it's a write-off

    You would be surprised how many bands you know that have never made a dime from royalties because they owe their label for the recording costs. Hopefully most signed bands are smart enough to know that the only money they'll likely see is from sales of schwag.

    • by autopr0n (534291) on Thursday January 23, 2003 @10:59PM (#5148509) Homepage Journal
      Note that this was a no-name studio, with a no-name engineer, and self-produced.

      Yeah, and it shows.
  • by cmcguffin (156798) on Thursday January 23, 2003 @09:51PM (#5148168)
    Steve Albini wrote a classic article, The Problem with Music [negativland.com], on the financial shenagins pulled by the record industry.

    The article demonstrates how a band can manage to generate millions of dollars of profit for a label, but still owe the label money.

    The article includes sample figures that indicate 'recording costs' of $150,000, and a wholesale price of $6.50 per CD (circa 1994, when the article was first published).

  • by The_Rippa (181699) on Thursday January 23, 2003 @09:54PM (#5148183)
    Man, I almost went blind reading that.

    On the other hand,

    if a chicken and half lays an egg and a half every day and a half, then how long does it take a monkey with a wooden leg to kick all of the seeds out of a dill pickle?
  • Quality and Fees (Score:3, Insightful)

    by Daetrin (576516) on Thursday January 23, 2003 @10:03PM (#5148221)
    Listen to how different a band sounds on its CD, and how it sounds "unplugged." In many cases there is a huge difference in the quality of the music.

    A high quality (ie expensive) studio with high quality engineers and high quality software and equipment can make a decent singer sound good, and a good singer sound great. That's where a big chunk of that change is going.

    Another big chunk is probably inflated values given by the RIAA in order to milk as much money out of the artists as they can in fees.

  • by Junks Jerzey (54586) on Thursday January 23, 2003 @10:06PM (#5148240)
    Sure, you *can* record something in your basement recording studio, and these days it can be pretty good, but it's easy to see where higher costs can come from:

    1. Bringing in a well-known producer to help you get the sound you want. Ditto for engineers.
    2. Studio time in the high-end studios--with millions of dollars in equipment--can be very expensive.
    3. Spending lots and lots of time in the studio--weeks or months instead of the "4 hours" people are citing. Heck, you'd be lucky to get one good take of a song in four hours, even in your basement studio.
    4. Session musicians brought in for various tracks.
    5. Celebrity backup singers (e.g. Emmylou Harris and Gillian Welch singing backup for Steve Earle).
    6. Weeks of production work done by someone else, often someone well known and highly compensated, after the initial recording sessions.

    Yeah, local bands don't do all of this, but we're talking about big "cash cow" acts here, not a bar band from Austin.
  • by sielwolf (246764) on Thursday January 23, 2003 @10:17PM (#5148308) Homepage Journal
    Steve Albini (musician and producer... did In Utero, Surfer Rosa, etc) did this article on the Problem with Music [negativland.com]. This all related costs for a band (an album, a single tour, and a few other things).

    Of course this is in early '90 dollars but here is the snip on the bottom:
    Advance: $ 250,000 Manager's cut: $ 37,500 Legal fees: $ 10,000 Recording Budget: $ 150,000 Producer's advance: $ 50,000 Studio fee: $ 52,500 Drum Amp, Mic and Phase "Doctors": $ 3,000 Recording tape: $ 8,000 Equipment rental: $ 5,000 Cartage and Transportation: $ 5,000 Lodgings while in studio: $ 10,000 Catering: $ 3,000 Mastering: $ 10,000 Tape copies, reference CDs, shipping tapes, misc. expenses: $ 2,000 Video budget: $ 30,000 Cameras: $ 8,000 Crew: $ 5,000 Processing and transfers: $ 3,000 Off-line: $ 2,000 On-line editing: $ 3,000 Catering: $ 1,000 Stage and construction: $ 3,000 Copies, couriers, transportation: $ 2,000 Director's fee: $ 3,000 Album Artwork: $ 5,000 Promotional photo shoot and duplication: $ 2,000 Band fund: $ 15,000 New fancy professional drum kit: $ 5,000 New fancy professional guitars [2]: $ 3,000 New fancy professional guitar amp rigs [2]: $ 4,000 New fancy potato-shaped bass guitar: $ 1,000 New fancy rack of lights bass amp: $ 1,000 Rehearsal space rental: $ 500 Big blowout party for their friends: $ 500 Tour expense [5 weeks]: $ 50,875 Bus: $ 25,000 Crew [3]: $ 7,500 Food and per diems: $ 7,875 Fuel: $ 3,000 Consumable supplies: $ 3,500 Wardrobe: $ 1,000 Promotion: $ 3,000

    Tour gross income: $ 50,000

    Agent's cut: $ 7,500 Manager's cut: $ 7,500 Merchandising advance: $ 20,000 Manager's cut: $ 3,000 Lawyer's fee: $ 1,000 Publishing advance: $ 20,000 Manager's cut: $ 3,000 Lawyer's fee: $ 1,000
    Record sales: 250,000 @ $12 =
    $3,000,000
    Gross retail revenue Royalty: [13% of 90% of retail]:
    $ 351,000
    Less advance: $ 250,000
    Producer's points: [3% less $50,000 advance]:
    $ 40,000
    Promotional budget: $ 25,000
    Recoupable buyout from previous label: $ 50,000
    Net royalty: $ -14,000
    Record company income:

    Record wholesale price: $6.50 x 250,000 =
    $1,625,000 gross income
    Artist Royalties: $ 351,000
    Deficit from royalties: $ 14,000
    Manufacturing, packaging and distribution: @ $2.20 per record: $ 550,000
    Gross profit: $ 7l0,000
    The Balance Sheet: This is how much each player got paid at the end of the game.

    Record company: $ 710,000 Producer: $ 90,000 Manager: $ 51,000 Studio: $ 52,500 Previous label: $ 50,000 Agent: $ 7,500 Lawyer: $ 12,000 Band member net income each: $ 4,031.25
    Of course Albini had a different point with this article: the majors screw people over so if you decide to not go independent, you are putting your life in your hands. Or from the article: "The band is now 1/4 of the way through its contract, has made the music industry more than 3 million dollars richer, but is in the hole $14,000 on royalties. The band members have each earned about 1/3 as much as they would working at a 7-11, but they got to ride in a tour bus for a month. The next album will be about the same, except that the record company will insist they spend more time and money on it. Since the previous one never "recouped," the band will have no leverage, and will oblige. The next tour will be about the same, except the merchandising advance will have already been paid, and the band, strangely enough, won't have earned any royalties from their T-shirts yet. Maybe the T-shirt guys have figured out how to count money like record company guys. Some of your friends are probably already this fucked."
    • by daviddennis (10926) <david@amazing.com> on Thursday January 23, 2003 @11:02PM (#5148531) Homepage
      About 1/3 of those items are to the direct benefit of the artists. The guitars, the sound equipment, the blow-out party, the catering, the tour bus and the limos are all effectively income for the artists.

      This trickery generally benefits the artists because they're not taxed on the benefits it provides them with, unlike the 7/11 clerk, who has to pay income and Social InSecurity taxes on every dime of his income.

      I'll bet the 7/11 clerk would change places with them in a heartbeat.

      I read a very interesting biography of Richard Branson, who founded the Virgin record label among other enterprises. He was taught a hard lesson in economics from the other side of the fence. He signed some number of bands. One was a huge hit, the rest did poorly. Overall, he made very little even though his business was glamourous and he had a lot of fun with it.

      In other words, just because the gross is pretty doesn't mean the net isn't ugly.

      In this case, consider that the semi-hit analyzed here has to support a number of flops, that don't come even close to recouping their costs. Overall, then, the label probably does a lot worse than you think, precisely because this guy selected a middle of the road example.

      Anyone know what the actual profits of the record labels look like?

      D
  • by OolonColluphid (591237) on Thursday January 23, 2003 @10:20PM (#5148328) Homepage
    on the artist, the label, the studio, etc. Even among people I know personally, the figure has varied widely. The most my own band ever paid in studio costs to record anything was when we paid $140 to record a six-song EP. I know one band who had a pretty decent regional following and were together for ten years. They released several recordings, but a lot of them were done really cheaply because they knew people who would cut them breaks.

    Two hardcore/metal bands I knew a couple of years ago from the same town each put an album out around the same time. One spent a couple of weekends at a small local studio and put together a full-length CD for about $1200. The other, who had hired a manager and thought they were going to go big time, took a month off, put themselves up in an apartment in a town 30 miles away and recorded an album in a "big" studio for $30,000. They never did get the big break. The two guys who wrote most of the material left the band because they refused to quit their jobs to do the joke of a "tour" the band set up after the CD came out.

    The band i farm, with whom my former band used to play shows, went from making self-released records at the same $20/hour studio we recorded at and being recorded by their friends in recording school to recently doing an album for a small indie label for $6000 at the Blasting Room (run by Stephen Egerton and Bill Stevenson from All/the Descendants).

    The point is, it's a really difficult question to answer. Really big bands spend a lot of time in really big, expensive studios working on albums. It's incredibly easy to run the cost of a recording up to the $200,000 mark or past when you're speding six months in a $2000/day studio in another country (thereby incurring housing costs as well). Or working in multiple studios. And bringing in guests to play. And hiring three different engineers to mix, etc.

    As for markup. When I was working in a CD store (1994), we, as an independent store, paid the one-stops an average of between 8.99 and 10.99 for discs which had a usual retail of about $15.99-$16.99 at the local chain store (it was a big deal at the time that the new Tom Petty greatest hits album cost us $12.49 and was going for $17.99 in the chain stores).

    Of course, as an independent, we had to undercut the chains by selling the discs for $13.99-14.99. And, of course, as an independent, we also had less buying power and had to buy discs through a middle man. The chains who were charging more for the same discs got them far cheaper directly from the labels by the truckload.

    One more thing to consider as far as major labels are concerned is that their idea of artist development is to throw a bunch of money at a whole group of performers and hope that one or two of them make it big. They charge the associated costs to make the album back to the artists and give them all a big advance. A couple make it and actually pull in enough money to cover those costs and make some money. The rest never see any money past their advance because they aren't paid royalties until the album breaks even. Some make several albums that never break even and just go deeper into debt with each album.

    The best thing that happens to some indie bands that jump to majors and don't get big is to get dumped from the label because by the time that happens they're usually so far in debt they'll never get out. If they've still managed to keep a good portion of their fanbase, they can go back to making cheaper albums for a small label again (see: The Mighty Mighty Bosstones).

    The interesting thing about the music industry is that albums are like films. If you keep the budget down, you don't have to get a lot of business to make money. Chasing Amy was Kevin Smith's most successful film not because it brought in the highest box office take. Chasing Amy, Dogma and Jay and Silent Bob Strike Back all made about $30 million at the box office, but Chasing Amy was the only one that cost less than a million to produce. Similarly, Elektra stays with a band like Phish, who refuse to promote themselves to a wider audience and don't sell a lot of albums because they sell a steady amount of albums and they don't spend a lot of money making those albums.
  • Factors (Score:3, Interesting)

    by Pinball Wizard (161942) on Thursday January 23, 2003 @10:24PM (#5148352) Homepage Journal
    having gone through the motions of this, both at a "real" studio, and with home equipment, the actual cost of making a CD has several factors that can vary widely:

    a) Musical equipment. Not cheap. Many unknown musicians think nothing about having 5-20 thousand dollars worth of equipment. Multiply that by the number of musicians in the band. OTOH, a $150 used MIM(made in Mexico) Fender strat played through a $100 amp will convincingly duplicate the "Nirvana" guitar sound.

    b) Studio Time. If a band is skilled enough, they can produce their records in a home studio. You could feasibly do this with one microphone plugged into the back of a sound card, record one track at a time, and mix it down with some program you downloaded off alt.binaries.whatever. Or you could spend more money. Or you could spend a lot more money.

    b2) You could hire out a studio and an engineer, and a producer, and this is where it really can get expensive. It would not be much of a problem to blow through 500 grand if you hired a couple of name brand guys and spent a month or two in an expensive studio.

    So, does it cost $500,000 to record a CD? It can. It can be done for much less. And if you have some geeks at your disposable who know something about audio engineering, you could conceivably even get a high quality record for a small fraction of what some rich rock star is going to blow through making an album.

  • by jcsehak (559709) on Thursday January 23, 2003 @10:25PM (#5148357) Homepage
    Bruce Springsteen recorded "Nebraska" by himself on a 4-track. If you figure $1000 for the 4-track and $500 for the guitar, you've got a professional album right there for $1500. I'll assume you don't want to figure in time spent practicing the guitar or money spent on lessons. But what about the actual CD? Do you have a computer (if not, add $1500 for say, an iMac and Digidesign's mBox (and if you like, forget the 4-track altogether))? Well, you can burn 1 for a quarter. Or you can get 1000 professionally duplicated for $1000. Or you can get a bazillion duplicated for a quarter-bazillion dollars. But you want to record in a professional studio? $50 an hour then, $100 an hour, whatever you want. Add an orchestra ala Metallica? What's that, $1000 an hour? Studio musicians? Take a wild guess. You'll find someone who works at that rate.

    And then there's the marketing. Just put up some flyers. It's free. Want something more effective? Buy a guest appearance on Saturday Night Live. Or negotiate a spot on the Tonight Show. Or something in between.

    And don't forget to pay the independent promoters to do their payola thing with the radio stations. Don't want to get involved with those goombas? That's okay. You've still got your album. Just don't expect it to get radio play.

    How much does it cost to produce an album? However much you want.
  • by zmooc (33175) <zmooc&zmooc,net> on Thursday January 23, 2003 @10:32PM (#5148397) Homepage
    1000 cds kost about $800 to produce, booklet included. 7 days in your own studio costs nothing. Bandwidth for 1 average MP3 costs $0.03. CDs for $2.00 should already have been reality something like 35973 years ago. The same for MP3s for $0.10 a piece and $1.00 per album. Sell 50K albums and you get about $25. I think that's about the same for artists in the current system.
    The system in which we all have to pay for way too expensive studios with way too much way too expensive managers which usually also produce a way too expensive videoclip and have a way too expensive team to think about what the next single from this or that album should be. All payed for by us. Well then we all have to pay for things like MTV, RIAA-tax, normal tax and the rest is income to artists. Some make multizillions a year but newcomers can hardly get on the market because of the marketing-machine all CD-buyers invest in. So I say once again: don't buy CD's from the big labels, don't record your album at the big labels. ANY band with a bit of a studio at home (cheap multitrackers work just) can record an album in a few days. Invest $800 in the first 1000 CD's and sell them online. Just send them out yourself - when the volume goes up, let somebody else do it for you.. ...but you'll never get through the marketing-wall the big labels have put up with the money of CD-buyers. The same wall that helped the region-code (or whatever it is) on the DVD, will help DRM to your PC and will help your money in their hands.
  • Korn cost $4 mil (Score:3, Interesting)

    by mackstann (586043) on Thursday January 23, 2003 @10:35PM (#5148409) Homepage
    i remember seeing this on the television set. korn's new album cost 4 million dollars, because they set themselves up in rental mansions during the recording, and all kinds of other ridiculous things. i believe i remember hearing that the 1 million dollar mark was reserved for huge artists.

    i'd say the average artist (but the average artist doesnt sell shit for records, comparatively) costs under $100K.
  • by smoondog (85133) on Thursday January 23, 2003 @10:40PM (#5148438)
    This is the wrong question. The cost per album is really, really easy to calculate. It is the amount of money a record company spends over the number of albums they sell. The real question is what is the minimal cost to producing an album and why do they pay so much more? Well I think it is probably very much like drug companies (which I *do* know something about). Like drugs or potential drugs, there are probably things being produced that never become profitable. Albums that don't sell, but are paid for have to be included in this value. These are reasonable expenses. The, IMO, unreasonable ones are like the massive PR machine that tries to keep the status quo.

    So you aren't asking the correct question. How much a single album costs is pretty much irrelevant to answering the real question you want the answer to.

    -Sean
  • My two cents (Score:3, Interesting)

    by Tuxinatorium (463682) on Thursday January 23, 2003 @10:44PM (#5148446) Homepage
    More than half of all the expenses go to advertizing and promotion. (not even counting concerts, because those pay for themselves and make a profit) In fact, it's an even larger expense than royalties. For a $12 album, I estimate $4 goes to the retail store, 100,000 copies regardless of filesharing or watnot. It can easily be produced for $20,000 + $0.50 packaging per copy + $3 royalties per copy. That means guaranteed profits as long as they can produce decent stuff while keeping costs down. Lack of profitibility is entirely the fault of the RIAA for having ridiculously and unnecessarily high espenditures. If they want to be more profitable they should stop spending so much money on bribing senators with campaign contributions, and let the music promote itself for a negligible cost by just mailing out free samples to radio stations.
  • by sdo1 (213835) on Thursday January 23, 2003 @10:50PM (#5148464) Journal
    The liner notes of Nirvana's first album Bleach [subpop.com] says "Recorded in Seattle at Reciprocal Recording by Jack Endino for $600".

    It's a great album. Captures everything they were about in their prime. It's not the best recording I've heard, but it's more than OK and I'm guessing the've made their $600 back.

    But other forms of music require a bit more than a four track and a couple of cheap guitars. Into techno/electronic music? Expect to spend more $$$ getting that to sound right. Jazz can probably be done cheaply. Point and record is how the best sounding recordings are generally done.

    IMO, any band that spends millions on recording is trying to get something that just isn't there. If you can't capture the essence of what your band is for far less money, then I suggest that the recording process is being used to hide the band's shortcomings.

    -S

  • by yiantsbro (550957) on Thursday January 23, 2003 @11:02PM (#5148530)
    Studio Time: 50K
    Well Known Producer: 250K
    Other Expenses: 100K
    Seeing your album on KaZaA the day of release: Priceless

    MP3's - there are somethings in life that you don't need money to buy - for everything else there is the RIAA
  • Ten years... (Score:3, Informative)

    by Frad Haskins (243521) on Thursday January 23, 2003 @11:06PM (#5148554)
    ...ago, I worked for a contemporary country artist (Michelle Wright, "Take it like a man" was *the* U.S. hit) as the front-of-house tech.

    She had a few cds out at the time, and I remember hearing from her (or her manager) that the cost to make an album *for the label* is around one dollar apiece.

    Frad
    Do I bother *YOU* at *your* work?

  • Cost = $0.00 (Score:3, Interesting)

    by Rai (524476) on Thursday January 23, 2003 @11:09PM (#5148563) Homepage
    http://www.buzzmachines.com [buzzmachines.com]
  • by richieb (3277) <richieb AT gmail DOT com> on Thursday January 23, 2003 @11:24PM (#5148647) Homepage Journal
    This album is a classic jazz album, which has been selling well (for jazz) since it was made in 1959. The record was made in two three hour sessions. What you hear on the album is the first complete take of each tune. Only one of the six tunes was recorded twice and the first take was used.

    Studio time, plus the musicians pay was pretty much a days work for the 10 or so people involved.

    Then there is the cost of pressing the records (which is probably higher than making CDs).

    Anyway, check out the book Making of Kind of Blue [dacapopress.com].

    Today you can probably record and print 1000 CDs for under $5000.

  • by Michael Snoswell (3461) on Thursday January 23, 2003 @11:37PM (#5148721) Journal
    Back in the early 90s my band recorded 3 albums, all self funded and it took about $2k each time. But we were amateurs and got equipment for free and used friends instead of prefessionals wherever possible.

    Today it's very different. I have a friend who does his own CDs. He writes it all and has his own prologic setup and does all his own music and sounds excellent.

    Now try recording a band who doesn't know anything about production. Invariably there's a sound engineer and producer - total cost is 100-200$ per hr but could be a lot more. Studio hire (and extra equipment hire if necessary) is anywhere from $0 to $X000 a day, but lets say its $500 a day. Now how long will this sucker take? Record it in a week and it'll sound like it. Let's say a month which still isn't generous. Then you're all working 12-20hrs a day. That's $2.5k a day, $75k a month. Then all the things we missed like up front money for the band to live off, legal fees, CD cover design, marketing and so much more.

    Yes, you can record a CD for $2k. But you can also validly spend $500k too (especially once marketing kicks in). Then there's all the times money is spent on all the above and the album bombs and makes hardly a cent (it happens more often than an album doing well).

    You want to do it all at home on your PC and do your own cover art etc etc. Great! More power to you, yep you certainly can. Doesn't Moby record all his stuff at home in his NY apartment? You can too! Now what's the chance you'll sell millions of copies (even if you're really good)?????
  • by billn (5184) on Thursday January 23, 2003 @11:44PM (#5148757) Homepage Journal
    Seriously. And I've spent all day slogging through invoices and records, so all this shit is nice and fresh in my head.

    Depending on the band, and the producer, and desired quality, base studio costs can run you from a few thousand to 20 or 30 thousand, depending how much you have to work with the artist. The studio charges you time and material, typically, including the media they master on. Most of the expense at this stage is for engineering, mixing, and mastering. If your band had to travel to the studio, you have that to account for, plus expenses if you flew in a producer or engineering team.

    Once it's mastered, you've got to think about selling it. That requires art and layout work. These costs can be anything from farting on a piece of paper for some color to god knows what else.

    Once you're ready to press, you find a manufacturer. For smaller batches, prices are understandibly higher. Decent quotes for quality CDs, covers, trays, plus time and materials for a batch of say, 3000 cds, would float around a buck to a buck and quarter per unit. Don't forget about shipping, because 3000 cds, in cases, weigh a little more than a pound.

    If you're paying staff to handle all this for you, you've got them to consider, plus your real estate and other overhead figures for the period they're working on it. If you're doing your own marketing, well, you get the idea.

    The major labels turn the market into a pigpen. CD prices for major artists are high because radio stations are fat and happy on the bribes^Wfees they charge the major labels for prime airplay. That's why you get the same 15 songs on a daily basis. You gotta root around to find the quality stuff. Labels with online stores for their artists (hint.) are great places to find quality music at prices that don't factor in distribution markups and larger overhead (which has to account for those large bribes^Wfees).

    Tired of what's on sale at Walmart? Check into your local music scene. The fish are fresher.
  • You're forgetting... (Score:3, Informative)

    by ToasterTester (95180) on Thursday January 23, 2003 @11:56PM (#5148818)
    In my day as a musician (no I won't say when that was) record companies signed about 100 groups per year and would hope 10 would be popular. But they still had to pay to record those groups, market them, underwrite tours, In other words they spend far more money than you are calulating, and losing a lot more than you are aware of. The recording costs you are talk about might work out the be the average. The big groups are dropping way more on recording and new groups records on super tight budgets. Then I hate to think about the money they waste on these formula boy bands and Britney all looks no talent types.
  • by droopus (33472) on Friday January 24, 2003 @12:13AM (#5148903)
    I won't even get into this swamp of comparing costs, but what no one has pointed out is that while there are situations where you can record great tracks in your basement using digital gear, it's not universally true for all musical styles

    Take classical music. You need a BIG ass room like Olympic 1 [olympicstudios.co.uk] in London, or at least a decent size room like Electric Lady A. [electricladystudios.com] That costs a lotta money.

    Many artists want to use a lot ot live, real musicians, and sometimes they require more than a tiny room filled with geekware to give a great performance.

    For proper strings, you need a nice space, ditto live drums. Same with live piano. Again for horns. Backing vocals sound great in a big room. And there is world of difference between lead vocals done in a bathroom versus those done in a solid isolation booth with a great mike.

    While we're on mikes, there is going to be a huge difference between some cheap ass stage mic and a Neumann U47 from the 40's which are VERY expensive.

    Then let's discuss mixing. Mix it yourself in your basement? Cool. But if you want it to sound amazing, get Bob Clearmountain or Andy Wallace to remix it at 5 grand a day.

    So, can you get a record out the door cheap? Yeah sure you can. Can you get a album that is as flawlessly made as a Seal CD? Not a chance. Even Nirvana had Andy Wallace mix their stuff.

    Speed costs money: how fast do you wanna go?

  • Wholesale costs. (Score:5, Informative)

    by erik_fredricks (446470) on Friday January 24, 2003 @12:13AM (#5148904)
    Trust me, $7.50 wholesale is completely off. When I was running a large-chain record store in the mid '90s, we were paying upwards of $10.35 to $10.80 for new releases. And that's with price-breaks for volume buying. Now imagine having to price those copies at $12.99 and expecting to keep the lights on. Retailers aren't the bottleneck here, the labels are.

    In late 1996, a label rep from WEA (Warner's distribution arm) told me that it cost the label an average of $3.20 per cd to get it to market. Thing is, that's for a major artist, and that cost includes promotion, big-name producer, etc. Your mileage will vary significantly.

    My advice is to get a good hard-disc 16-track (about $800) and do everything up to the mastering process yourself. Take the product to a local engineer and have him master it (usually about $200, often far less). With the finished product in hand, all you have to do is cut a deal with a distributor. From there, you have the choice as to how it's marketed, promoted, and most importantly, priced. Even if you can sell it at $10.00, you'll be far cheaper than major-label stuff, and yes, price is a selling point.

    One last thing. If you do it yourself, it's yours. It can't be shelved three weeks before release, used without your consent in a Gap commercial or held for ransom because you threaten to break a restrictive and humiliating contract. Paul Simon still has to pay to play "Sounds of Silence" in his concerts.

  • Size does matter (Score:5, Informative)

    by sph (35491) on Friday January 24, 2003 @12:18AM (#5148929)
    The problem is that not every record sells a million copies. Not every artist tours large arenas and stadiums. Many international artists sell perhaps 50000 copies per album, and tour at small clubs. If they can afford to tour at all.

    Let's say we have a five-piece rock band just trying to get their stuff heard. After spending months of their free time writing and rehearsing material they decide to record a four-song demo. One full day in a studio with an engineer. Then mastering, and optimistic 1000 copies of the disc, including cases and artwork, to sell in the Internet. Total cost approximately $2000. If they sell all the copies for $6 they get $6000. Reduce expenses, and they have $800 for one person. That's not much for months of hard work put into their material.

    Let's take another example. CMX, a popular Finnish band who have basically no markets outside of Finland, because all their material is in Finnish. Three years ago they did a 120-minute double-album, which has sold over 20000 copies (that's successful, gold certification in Finland is 15000). They had two studios for four months to record it. Total cost, including cost of people involved, was probably somewhere near $200000. That's about $10 per album sold. Add distribution and marketing. Had it been a single-disc album it would've been a disaster, but as a double-disc it could be sold for a slightly higher price of about $22-$25.

    This is one of the most expensive albums ever produced in Finland. It wouldn't have been made if they weren't a well-established and popular band. Getting songs even recorded and released if your potential audience is small (like in smaller countiers, or with somewhat marginal music) isn't easy.

    Most less-known artists have dayjobs, because they would have to sell tens of thousands of CDs every year to make enough money to live. A lot of my over 600-CD record collection is from artists, who sell perhaps 20000 copies of their albums worldwide. They simply can't afford $200000 to do a record, nor have they time to write and record a new album every year because of their jobs.

    Then again, should records really cost only as much as the production, marketing and distributing them really costs? Sure, you could get the latest Britney Spears or Limp Bizkit disc for $5 and they would still be profitable for the record company, but stuff by CMX or Shadow Gallery or [insert your favourite underground artist] would still be at least $15 just to break even.
  • by Irvu (248207) on Friday January 24, 2003 @12:25AM (#5148949)
    The cost of Promoting the CD, this includes:
    1. advertisements for the song(s).
    2. payola/Kickbacks/"Finder's Fees" for radio stations and MTV.
    3. The costs of organizing public relations appearences for the the band members at various locations.
    4. The costs of getting the band in the door to play their songs at various venues (various TV Shows, clubs, benefits, etc.
    5. And, the costs of a road tour.


    Keep in mind that, despite how little the artists make there is still money to pay out to:
    1. The author of the tune (not always the band).
    2. The Producer of the Tune (also different from the band.
    3. Whoever else owns a copyright chunk of the tune (there are more I beleive besides the band).
    4. Studio Musicians.
    5. Technicians to setup the Studio.
    6. Lawyers.
    7. PR People who advertize the band with flyerr or whatever else.
    8. Whomsoever designed the CD Cover art, poster cover art, T-Shirt Cover art, etc.
    9. Whomsoever pressed the damn things.
    10. The Manager(s).
    11. Aaaand... The Band

    Ultimately I think that asessing things on a per-cd cost is the wrong way to go. The RIAA Like everyone else is not just into CD's they are into "Brands." Each band isn't just woth the fees for CD's but also the revenue from concert tours (that Ticketmaster doesn't take), the Revenue for Music Videos (minus the cost of getting them made), T-Shirts, Magazine appearences, benefit shows, movie spinoffs (I'm certain that Britney's manager got a cut of her acting fees), etc.
    So the real question is, is the amount that I kick in to the brand with my cd price of 20USD "fair" or am I getting shafted by the same people who claim that I'm screwing them because I have an internet connection and a CD burner and therefore must be stealing Mettalica's crap?
    I say its not. Even though Clearchannel owns enough radio stations to dictate the rules there, and MTV/VH1 are in the same sets of hands, thus forcing the record companies to play by their rules, I still think that they're doing well. I belive this because The costs of CDs has risen faster (so far as I can tell) than the rate of inflation. In order for this to be a survival move it would mean that:
    1. The amount of revenue from some other stream (T-shirts etc) has fallen off but, the last time that I checked the RIAA was not reporting a shortfall of licencing rights requests, and Ticketmaster was doing well for itself (suggesting that concerts are still doing well).
    2. The costs of producing CDs (or other aspects of the band) have gone up more than inflation but:
      1. The cost of producing that CD according to the logic of industry should only be going down as more and more people purchase sound equipment and newer equipment becomes availible. As Henry Foird showed doing things on a massive scale can "standardize them to cheapness."
      2. The cost of paying the bands could have gone up but, the last time that I checked even the successful stars were complaining of low pay.
      3. It is possible that the cost of legal or business issues surrounding the bands have become more expensive such as in hiring extra lawyers to sue verizon. But, without taking a deeper look at the company books I cannot prove or disprove that one.
    3. The record companies are maintaining fewer bands and therefore have less revenue streams to rely on. This is one that their opponents have accused them of, and that they have admitted to. But, this one is purely under their control and therefore I have no sympathy for them.


    At then end of the day though I have little sympathy for them because:
    • They just lost a price-fixing lawsuit showing that a Federal court beleives that they are conpiring to bilk us.
    • They themselves (not clearchannel or MTV or Ticketmaster) control how many different bands they produce.
    • They themselves (and noone else) have worked to kill Internet Radio, Peer-to-Peer Systems, and indeed our general freedom to innovate.
    • Thair profits have dropped less than the economic downturn would suggest especially for what is, after all, a luxury item.
    • I can't stand most of the music that the major's priduce anyway.


    To Quote Paul Wolofowitz "Companies come, companies go that's the genius of capitalism."
  • by JohnLi (85427) on Friday January 24, 2003 @12:29AM (#5148966) Homepage
    I have a band, Metric Nut metricnut.com [metricnut.com], and we have a cd about to come out on February 25th on Times Ten Records. The cds total cost to record for us was about $10k. This is a pro peice of work. The studio that we use is a moderately high end place that charges in the 500 a day range and since we aren't selling a million records we only pressed a couple thousand at about 90 cents each. We have gotten a little college play around the US, and some good reviews, so you can figure that the recording is decent enough, although look at the white stripes...that is a garage recording.

    Anyway, for refernce, Nirvana's big hit record cost about 50k in the end to record, they probably paid somewhere in the 10-20 cent range for each unit, but they spent 100 million on promotion. its pretty easy to see why they charge 15 dollars each.

    In the end it realy depends on your level in the pyramid, and your budget. I have heard awesome records that i know cost half of what our did, so It can be done relativly easily, you just have to have your head on the right way on the right day.
  • My debut album costs (Score:5, Interesting)

    by Thunderweasel (562182) <{moc.llahsramsined} {ta} {sined}> on Friday January 24, 2003 @09:41AM (#5150554) Homepage
    I self-produced my debut album. Over 1000 Compact Discs for approximately $3,500. I discovered though, after you have the product is when the real costs start to accrue. Lawyers, distributors, advertisements, promotion, all of them want their pound of flesh.

    I had something that I needed to say with the album. I wasn't looking to become a Superstar I just wanted to make my money back. A lot of people were really supportive of my songwriting. Requesting my songs in the clubs. I'd been interviewed by reporters, signed autographs, and won a competition with one of my songs. I figured if I could get $5 per CD then I could sell 700 and break even. Leaving 300 sample/promotional CDs.

    I got a distribution deal, UPC barcode, top spine label strip on the CDs, and got one of my songs onto a compilation CD that was sent to approximately 400 radio stations here in America. I'm thinking why would anybody need a record label? I can do this all on my own.

    Then I found out that this is when the hard work really begins. Everything I've done until now has been for naught. I've got boxes of CDs that no one knows about and I don't know how to promote them. I'm a songwriter, not a salesman. I can hire independent promtional teams for as "little as $250 a week" they said. They'll get my name out, put stickers on walls, give away T-shirts, etc. Of course I have to have the stickers and the T-shrits, after I've spent thousands making the CD.

    Well I'll just play, I thought. The music's what important. Until I got a phone call at home from a club owner saying they couldn't allow me to play my songs there, because someone had threatened them with legal action. Appearantly my songs are "intimidating" and they took offense to them. I don't who it was, but it was probably the same person that was sending certified letters to my P.O. box saying if I didn't apologize for my music they were going to sue me within five days.

    I was getting requests for my CD from radio station DJs in Europe (Great! I've promotional ones I can send them). I didn't figure the cost of mailing them out. The shipping costs added to the price, dollars depending on where it was going. Some countries have import tariffs, customs requirements, etc. I either had to sell more CDs or increase the price. Can't sell them without promotion, which I can't afford.

    I tried a free web hosting service to promote the album, but the bandwidth was far too limiting to allow MP3 downloads. So I pay monthly for improved reliability Shameless self-promotional plug [denismarshall.com]. More money. More cost.

    Then the distributor sends me an E-mail saying Valley Media, which is their link into main distribution channels, has gone bankrupt and I won't see any money for any of the CDs they had in their warehouse.

    I've been threatened, harrassed, investigated (3 times now), insulted, lied to, stolen from (by companies not fans). I understand why some bands say they don't want to be famous. I found out what real parasites some people can be.

    I finally put all the songs on my website as free MP3 downloads. I rather give the music away that have it used against me. Besides it's not that good. (Told ya' I not a salesman)

    P.S. Did you know that managers at some chain record stores don't have the authority to buy CDs? They're only allowed to stock what they've been shipped from the corporate buyers.

  • by djblair (464047) on Friday January 24, 2003 @10:34AM (#5150951)
    Remember you are paying for MORE THAN THE DISC when you buy a CD. I must admit that CD's are grosley overpriced. YES, the record companies are making a killing and YES, the artists are (for the most part) getting screwed. However, looking over the threads, I've seen some people are a bit unclear about the process of creating a CD and the costs involved.

    As mentioned in an earlier post, the compact disc media has become very very cheap over the last 15 years, yet CD prices continue to rise. Here are some of the other costs involved in producing a CD:

    MECHANICAL LICENSE FEE: When you buy a CD, part of the cost covers a mechanichal license fee. Believe it or not there is a fee of 7.55 cents PER TRACK for any CD pressed.

    RECORDING/ENGINEER FEES: It is not a simple process to create a CD. There are 3 steps, recording (at least $2,500 per track assuming you don't need to many overdubs), mixing (at least $2,000 per track) and mastering (at least $500 per track). Now these costs are relative to the caliber of studio you record and mix at. For a big-time artist at a platinum-quality studio, you can easily quadrouple these numbers.

    RECORD COMPANY FEES: Most people get upset and claim these guys are driving the cost way up. Well, for the most part, that is true. But it is important to realize that these people are the ones responsible for promoting an album. The artist does NOTHING to help move their albums (well, I suppose you can count touring). The producers and record execs do all the work to push your album.

    PRODUCTION: It boils down to $2.25-3.00 per disc for 1,000 - 10,000 copies. This includes a glass master, the disc itself with 4-color face printing, 10 page 4-color insert, jewl case, barcoding and all those annoying stickers on the case edge. For large quantities, the cost is certainly hess. Probably about 40% less for more than 500,000 copies.


    I certainly hope you find this information useful.

    -DJ Blair

Put your Nose to the Grindstone! -- Amalgamated Plastic Surgeons and Toolmakers, Ltd.

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