What is the breakdown on the $17.98 I spent on buying that new release
at Sam Goody? How much does the store get, how much does the artist
get, how much goes to middlemen (production, distribution,
advertising). What is the record companies net profit?

Record Label CD Cost Breakdown
2004-10-14

An excerpt from the rollingstone.com article Wal-Mart Wants $10 CDs:

    Price War: Does a CD have to cost $15.99?

    Major labels insist that the low prices mass retailers such as
Wal-Mart and Best Buy demand are impossible for them to achieve. But
Best Buy senior vice president Gary Arnold counters, ?The record
industry needs to refine their business models, because the consumer
is the ultimate arbitrator. And the consumer feels music isn?t
properly priced.? Labels point to roster cuts and layoffs as evidence
that they can?t sell CDs cheaper.

    This breakdown of the cost of a typical major-label release by the
independent market-research firm Almighty Institute of Music Retail
shows where the money goes for a new album with a list price of
$15.99.

    $0.17 Musicians? unions
    $0.80 Packaging/manufacturing
    $0.82 Publishing royalties
    $0.80 Retail profit
    $0.90 Distribution
    $1.60 Artists? royalties
    $1.70 Label profit
    $2.40 Marketing/promotion
    $2.91 Label overhead
    $3.89 Retail overhead

Interesting stuff. At a glance, it looks like they need to cut down on
overhead. Also bear in mind that these prices are in USD, so it?s more
like $22.00 per CD here in Canada.

http://nosleep.ca/blog/article/199/record-label-cd-cost-breakdown

CNN has abreakdown form Billboard with a graph to go with:

http://www.cnn.com/interactive/entertainment/0101/cd.price/frameset.exclude.html