Some light shed on record costs - G. Platrow deal

[out of reach]

While there are differences from artist to artist, this is a legitimate breakdown from an anynomous record exec.

From Billboard.com:

secure.billboard.biz/bbbiz/industry/record-labels/how-would-a-900-000-gwyneth-paltrow-record-1005069222.story

[#LisaRinna]

Mar 11, 2011 16:58:52 GMT -5 wallace said:

On the other hand, the margins on digital singles cited there would seem to shoot down the conventional wisdom (at least on Pulse) that singles sales are irrelevant to whether an album is profitable.

They are definitely profitable for the label, but for the artist not so much. Especially if the artist doesn't get writing royalties out of it.

[Adonis the DemiGod!]

Great read. Thanks for sharing.

[neverduplicated]

The article stated that "CDs and digital albums have a gross margin of about $4 per unit while $1.29 tracks have around a 60-cent gross margin and $0.99 tracks have around a 40-cent gross margin." That means that the profit from album sales is still about 7-10x greater than from single sales. Further proof that while the music industry is turning into more and more of a singles market, the big bucks are still in consistent album sales. For example, the profit from selling 1 million albums will be about $4 million dollars. To make that same profit from single sales, an artist would need to sell 7-10 million singles.

[Epic Fail]

Mar 13, 2011 5:11:28 GMT -5 neverduplicated said:

The article stated that "CDs and digital albums have a gross margin of about $4 per unit while $1.29 tracks have around a 60-cent gross margin and $0.99 tracks have around a 40-cent gross margin." That means that the profit from album sales is still about 7-10x greater than from single sales. Further proof that while the music industry is turning into more and more of a singles market, the big bucks are still in consistent album sales. For example, the profit from selling 1 million albums will be about $4 million dollars. To make that same profit from single sales, an artist would need to sell 7-10 million singles.

Yes and no. It also cost more money to market a CD than a single, so there are additional cost to factor in as stated in the article. Also, artist like Katy Perry and Ke$ha who have sold more than 10mm singles and about 1.2mm albums make more money via single sales than album sales and I think that is/ will become more of the trend.