Mahoora wrote:Hey all. after the discussion which is going on the torrent downloading topic (
http://www.blind-guardian.com/forum/vie ... 23&t=36868 ) an ancient question came back to me that've been bothering me for a long time:
where does the money comes form in the music buisness? or let it be the Metal/rock music industry.
Ill true to answer your questions as clear as possible. I point out in advance that I'm going to generalise for the sake of painting you a good picture. There will of course be examples of cases that contradict these answers - I just omit them because I see them as the exceptions rather than the rule.
I think this question has two sides, first the writing/recording side: when a band is at the studio composing or writing an album, who pays for the studio time,producer,technicians? is it the record company or the band themselves?
A bit of both, actually. Not counting the last decade, it has been custom for recordcompanies to advance the money for the recordings. The label sends the band off to a studio and pays for the costs of the recording, as well as the costs for the video and the advertising. This money is considered as an advance of the royalties. While this sound good on paper, it basically amounts to bands being in a huge debt with their recordcompany by the time their album hits the street; debt which is repaid through the royalties.
For example: imagine an album costs 50.000 euro's to make (which is not that much), a video costs 10.000 and the advertisement costst 15.000. This means that the band is in debt for 75.000. The band makes about 80 eurocents per album, so the band has to sell 100.000 albums before they get to see any money from the royalties.
When I say debt, I have to say that it is not a redeemable debt (like an unpayd phonebill, for example). The band usually signs for an x-amount of albums, and when the deal ends, the debt is written off. If is slighly different when the band wants an early release from their contract to switch to a new label. In such a case the band or their new label is 'kindly' asked to repay the investment. This is where a lot of lawsuits between bands and their former labels come from.
So technically its the recordcompany that pays for the studio, but in the end it comes out of the artist his wallet.
The above has changed in the last decade, away from the favor of the bands. Nowadays it is more and more common for recordlabels to only distribute the finished album, with lower royalties. Bands are expected to finance albumrecordings, videos and advertisement themselves - in other words, to present the recordlabel a finished product.
besides does the label pays the band members a salary during that time? (because during that time, and especially for a band like BG who takes a looooot of time to write and record

it's gonna be difficult for the bards not to have an income during years right?).
They dont. A recordcompany doesnt employ its muscisians, so they should have a separate source of income when they are working in the studio.
Eventually when the album is finished and released, does the band takes any profit percentage of the sales? or does that all go to the record company?
Bands receive a royalty based on the price of a cd sold through the wholesale channels. This used to be around 80 eurocents, but it is significantly lower.
The artists always retains its copyright, so theres always a source of income gerated from reproduction of the music. Reproduction is not meant in the mechanical term, but relates to the times the music is heard by a person. This concurs when the radio plays your song, when it is played in a bar or when another band covers your song on stage.
I know for sure that the label has some serious album promoting business to do but what are the other relations between a band and a label? does they send a delegate or something into the studio to oversee the production and give an opinion maybe on the market conditions? or the band just surprises the company with its material?
Interesting question. It depends on the contract the band signed. Obviously a recordlabel signs a band to make a profit, and not for the love of the music. There have been numerous cases of recordlabels having full control of the artwork, the sound, the packaging and the choice of songs. Basically it depends on the policy of the label (some give unlimited creative freedom) and the quality of the bands lawyer who reads the fine prints before the bind signs on.
The second side is of course the touring side: when it comes to touring, does the label takes a share of gigs profits? or all of it goes to the band and the local promoter?
Three options.
a) The headliner chooses a door-deal, where they get a fixed percentage of the tickets sold. This means thyey'll make a good amount of money when the venue sells out, but also means that theyll have no money to eat on a bad night. This doesn''t happen a lot in metal, btw.
b) The band is booked by a touring-agency, who in turn is in touch with the local promotors. The local promotors pay the touring-agency, who deduces their profits and expenses and pays the band an amount of money agreed beforehand. Bands are either part or an exclusive deal or are part of a packagedeal with for example 3 other bands. This is quite common in the metalscene.
c) The band is part of a package mentioned above, only the band is expected to pay for the expenses of the tour (for example the tourbus). The rate is generally 10 to 15.000 euros for 2 weeks touring Europe. In return to funding these costs the band gets a spot as the opener of the evening. This is quite common and happens to all these debuting bands that youll see opening for your fave headliners.
In general, recordlabels have little to do with touring, although they do have an interest in pushing their bands through the throats of touring agencies as much as possible.
also does the record company has a part in promoting tours? I mean does the label representatives in different countries try to make an impact on local promoters (by promoting the album maybe) in order to get them into that country (especially new unvisited countries by the band)
Not on the local promotors, but certainly on the touring agencies. Convince an agency to hook up with your signed band, and you have free advertising for the cd.
And finally what about merchandise? what goes where? etc
It goes straight in the pockets of the band. A t-shirts costs about 5 euros to make and sells for 25 (when a band is part of a packagedeal it is custom for the contract with the touringagency to dictate the price of the merch - where the price of the shirts of the openingband have to be sold at the same price as those of the headlined). The remaining 20 euros is for the band. The person selling the t-shirt is usually the tourmanager or a girlfriend of a bandmember.
It is slightly different when you are playing a big hall, where you are legally forbidden to set up your merchandise stand - unless of course your bands lawyer negotiated something different in your contract. In those cases you just hand over your shirts to the venue, they sell them for 25, and you get about 22,50 euros in return (which is still a good deal is you sell 500 shirts on an evening).
sorry if that was a little bit long

but I really want to find the answer for this one and i think it's gonna be good for a lot of ppl to find out about this side of music industry as well (the dark side

). Wouldn't it be great if Marcus for example answered this one by him self! but I'm going to have high hopes (he's turning holograming these days

) so please anyone who has a bit of information you're welcomed to post your knowledge
Well, I hope this helps. I worked in the musicndustry for years (as a journalist, organiser and roady) and its a dirty busines. If you think it all happens because of love for the music, you are painfully wrong: its about the money and the money only.
In conclusion I say: download whatever the fuck you can, then go and see your heroes on tour and buy as much of their shirts as you can possibly wear.