Hi! Thanks for the question.
I was able to do a research on CD distribution in the past,
specifically in 2003, and it seems that the data I found there are
still one of the most comprehensive at the moment.
a.) 2003 reports on the price structure of CDs
http://answers.google.com/answers/threadview?id=200983
Please Note: The first two links in that answer are not working
anymore but we can still get the links from the Internet Archive.
?Why CD's Cost What They Do?
http://web.archive.org/web/20030406082711/http://www.outsideshore.com/cadenza/cd_costs.htm
?RECORDING ARTIST ROYALTIES? by Todd Brabec & Jeffrey Brabec
http://web.archive.org/web/20040604174755/http://www.ascap.com/jam/read_about/mm_artist.cfm
-----------------------------------------------------
b.) 2003 Digital Music Distribution
Digital Music distribution as can be seen from this website is a lot
trickier. Here is a breakdown of the revenue distribution.
Example: Apple Itunes $0.99 song download
Record Labels: 60 to 70 cents (This includes the 10 to 12 cent
publishing rights per song)
Online Financial Transaction
Cost to Credit Card Companies: 10 to 15 cents
Marketing: 5 to 10 cents
Online Staff Salaries: 3 to 5 cents
Bandwidth & Hosting: 2 to 5 cents
Start-up Costs: 2 to 3 cents
Total: 82 cents
?Microsoft, again: Apple's old nemesis?
http://news.com.com/2009-1027-1009538.html
Artists according to the following site are paid between 8 to 14 cents
per download. We can assume that this payment comes from the share of
the Record Labels.
?iTunes download service and others only help rip-off musicians? by Seán Byrne
http://www.cdfreaks.com/news/8232
-------------------------------------
c.) DVD Revenue Distribution
Now DVD revenue distribution is even more complicated than Music CDs
and digital downloads. The reason for this is that aside from the DVD,
theatrical releases are considered as well. Anyway for the moment let
us concentrate on the DVD part alone.
In this article, the DVD of the movie ?Big Fish? is taken as an
example and Amazon is the retailer selling it.
Amazon Price = $20
DVD Wholesale cost to Amazon = $16
DVD Production Cost = $5
?Big Fish sells 2 million DVDs in its first week? by John August
http://johnaugust.com/archives/2004/big-fish-sells-2-million-dvds-in-its-first-week
Seems like the profit is big on a per disc margin? But there are other
costs that should be taken into account.
The following data are outside the ?Big Fish? example but gives us a
further breakdown of the cost scenarios for studios that will offset
the $11 or so profit per disc and how tricky they can be.
Residuals to Directors and downline staff ? ?1.5% of Producer's gross
under $1 million plus 1.8% of Producer's gross over $1 million.?
?Residuals?
http://www.dga.org/news/dgamonthly-0505/news_residuals-505.php3#what
Actors ? approximately 15 cents per disc.
?Writers and directors usually get about nickel residual each from
each $15 DVD, while actors split up about 15˘ per disc.?
?Actors get no DVD gain? by Susanne Ault
http://www.videobusiness.com/article/CA612416.html
However, sometimes actors and directors can get more.
?On big blockbusters, top actors can demand that 35% to 40% of
homevideo be considered for royalties. Top directors like Robert
Zemeckis or David Fincher can get 30% to 35% of video royalties.?
?If they defer their upfront fees, top directors can sometimes demand
that 100% of DVD revenue be made available for royalties. Clint
Eastwood is understood to have made just such a deal on ?Mystic
River.??
?It takes talent to divvy up DVD? by CLAUDE BRODESSER and DAVE MCNARY
http://www.wgaeast.org/mba/2004/articleindex/2004/02/22/variety/
DVD Marketing costs meanwhile can be within $3 to $4 million dollars
or just a fifth of the movies overall marketing budget.
?For instance, last year, DreamWorks Home Entertainment?s Old School
pulled in $73 million in box-office receipts, but the movie?s home
video revenue posted almost twice as much with $143.5 million,
according to DVDX research. Only $3.8 million was spent for home video
marketing about one-fifth of School?s estimated theatrical marketing
budget??
You can get more DVD marketing figures in the next link.
?DVD growth spurs spending spurt on home video marketing? by WAYNE FRIEDMAN
http://www.dvdexclusive.com/graphics/0804Advertising2.pdf
Comparing the total expenditure on DVD marketing which is $566.9
million with the figure of total DVD sales of $12 Billion dollars, we
can say that marketing cost is just about 4.7% of sales.
?DVD continues spinning success? by Mike Snider
http://www.usatoday.com/life/movies/news/2005-01-05-dvd-sales-inside_x.htm
Reviewing our figures, we can estimate the cost per disc of a DVD movie.
DVD Production Cost = $5
Actors share = about 15 cents per disc (although it could go as much
as 35% to 40% for royalties)
Residuals to Directors and downline staff = 1.5% Producer's gross
under $1 million plus 1.8% of Producer's if it grosses over $1 million
Marketing Costs = about 4.7% of sales
Finally, taking into consideration the movie distribution on DVDs, it
would be good to see on how it interacts with the costs of the
production of the movie itself from theatrical release until it is
shown on home video. Our final link provides a discussion on the cost
margins here and it would be good to read the article to get a much
deeper insight.
?Hollywood 101?
http://www.heatherhale.com/hollywood101.asp
Search terms used:
CD ?digital music? revenue distribution downloads
DVD revenue advertising marketing studios actors costs profits
I hope these links would help you in your research. Before rating this
answer, please ask for a clarification if you have a question or if
you would need further information.
Regards,
Easterangel-ga
Google Answers Researcher |
Clarification of Answer by
easterangel-ga
on
03 Jan 2006 14:06 PST
Hi again!
CD and DVD sales are quite different because unlike CDs, DVDs have
theatrical releases before them. Successful theatrical releases
influence DVD sales since even with little marketing costs, the DVD
will sell since people are now waiting to own the Home Video version.
Plus the residuals to the directors make it very difficult to pin down
the cost of payout to directors and downline staff on a per disc
level.
Anyway, I already have the figures you want at that level but please
understand due to the difference in industry, the components and the
inner workings will vary between a DVD and a CD.
a.) DVD Over-All Production Costs
Actors share = 15 cents
Residuals to Directors and downline staff = 1.5% Producer's gross
under $1 million plus 1.8% of Producer's if it grosses over $1 million
Marketing Costs = 50 cents
DVD Physical Media Production Cost = $5
b.) Distributor Cost - Studios like Miramaz, usually are the
distributors or wholesalers themselves of the cinema releases and of
the DVD. So they save some money there. For small films however, it
varies for different movies. Like Miramax paid for the distribution of
the movie Swingers $5 million.
See Distribution Section of the article in this link:
http://www.heatherhale.com/hollywood101.asp
c.) Sold to Retailers like Amazon = $16
d. Amazon sells it to customers at about $20.
Prices will then vary on DVD popularity, stocking costs and other factors.
I hope this clarifies my answer.
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