1. Monday 8th
November
How much is music worth?
L.O. To assess the value of music and the impact of
file sharing on the business.
What process needs to happen before a CD is
released onto the shelf? What stakeholders are
involved?
What do you think is a reasonable amount to pay
for music? How would you divide this money up
between the stakeholders you’ve outlined
above?
2. L.O. To assess the value of music and the impact of file sharing on the business.
Say a CD is sold in HMV for £10.
How do you think this money is split between:
Part of process % or £
Artist
Songwriter
Record Label
Packaging
Shop (i.e. HMV)
3. How is this money is split between:
Part of process % or £
Artist Record Royalties – 13-20% depending on the
artist. After deductions (see below) this
amounts to £1-2 depending on the contract.
Songwriter Mechanical Royalties - 8.5% / 85p per album
(if they’ve written all the songs on the
album). They may also have a 70/30 split
with their publisher.
Producer 6% of Record Royalties (from the artist).
Record Label 35% (roughly) What overheads do they
have?
Packaging 25% of Record Royalties (from the artist).
Shop (i.e. HMV) 40% (roughly) What overheads do they
have?
5. How do artists make other money?
• Broadcast Royalties – a doctors surgery will pay
£50 per year for having a radio playing whereas
the BBC pays according to its audience size.
These royalties are paid for the lifetime of the
artist and seventy years beyond. When an artist
performs live the songwriter is entitled to 3.5% of
the ticket sale revenue.
• Airplay Royalties – applies for 50 years after
release date of song and is measured on area of
shop, seats in a restaurant, advertising revenue
etc. This is split 50/50 between record companies
and performers.
6. What is Convergence?
Convergence is where record labels profit from
exposing songs or artists in different outlets e.g.
• Royalties from their music playing on films and
adverts
• Artist deals with brands
• Appearances on TV
• Gigs/tour
• Merchandise
Read summer festivals article
7. How has digital music impacted on the ‘cost’ of
music?
• What corners can be cut?
• What other costs are incurred?
8. How much do dealer’s pay for music?
Downloads dealer pays £4.55
retailed at £7.99
potential retailer ‘profit’ - £3.44
CDs dealer pays £6.42
retailed at £8.99
potential retailer ‘profit’ - £2.57
• What about retailers that sell the albums for
less than this?
