I need specific details about how the retail price of a CD breaks
down.  By this, I mean: How much goes to the artists?  To the retail
store?  To the record label?  The more information the better.  $3.00
is the base rate, I will use the tip feature to compensate accordingly
based on the quality of the information and the speed with which it is
posted.

Either no one cares about this information except me, or there has
been some kind of conspiracy to prevent this information from being
made available online, because I just can't find it!

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Request for Question Clarification by easterangel-ga on 07 May 2003 22:00 PDT

Hi! The problem with this is that that part of royalties paid to the
artist which could significantly affect revenue distribution. More
popular artists command higher percentages.

I was able to find a website which discusses the cost components of
makng a CD for the music industry but no specific figures. Just a
discussion of the cost elements. Would this be accepted as a
legitimate answer?

Just let me know. :)

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Clarification of Question by bl00d-ga on 07 May 2003 22:07 PDT

I'm much more interested in the amount that goes to artists rather
than the cost associated with actually making a CD.

I understand that artists with bigger bargaining power will command
higher percentages, but what I would really like is an average.  Let
me know if you can't find that.

Hi! Thanks for a very interesting question.

I was able to find an article just recently in my research work as I
read your clarification. It specifically answers the question in your
original query.
 
Here is a breakdown of the numbers for the price of a CD.

a. Manufacturing Cost:
Artist Royalties - usually a dollar per cd - $1
Composer Royalties - usually a dollar per cd as well- $1
Physical Product Cost - $2 to $3
Advertising Promotional cost - about $1 per CD

b. Total Manufacturing cost - about $6 per CD

c. Markup to Distributor - $2 (so the CD costs now are between $7 -
$9)

e. Distributor then sells to stores with a markup of at least $3 per
CD -
Retail Store buys the CD at $10 to $12

"Why CD's Cost What They Do"
http://www.outsideshore.com/cadenza/cd_costs.htm

Since you stated in the clarification that you are more interested in
the royalties received by the artist, this website provides a sample
calculation of the usual royalties for top artists. The average
estimate here is shown as  $2,040,000 according to the calculation.

"Artist royalties usually range from 10% to 25% of the suggested
retail price for top-line albums, with deductions being made for
packaging costs."

"RECORDING ARTIST ROYALTIES"
http://www.ascap.com/jam/read_about/mm_artist.cfm

One example of an artists royalty payments that could go even higher
can be seen in the case of Shania Twain. Shania received at least $10
million in royalties from the album "Come on Over".

"When I was at Mercury Records, we agreed to give Shania Twain an
increase in her royalty rate in the range of 40 percent if she would
deliver Come On Over in time for a fourth-quarter release in 1997.
Shania had a weak deal despite having sold 10 million copies of her
previous album, The Woman in Me. The boost in royalty rate was
conditional upon Shania finishing her work quickly; she did, and the
Q4 (ed note: fourth quarter) release of Come On Over significantly
propped up the PolyGram numbers for 1997. And in the process, the
renegotiated rate has earned Twain at least an extra $10 million.
Every artist coming off a multimillion seller has similar leverage
with the bosses of the big companies."

"Label Exec $$ Breakdown"
http://www.rapcoalition.org/label_exec_$$_breakdown.htm

Search terms used:      
artist royalty costs CD
CD revenue percentage retailers  label artist  
                 
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.
                 
Thanks for visiting us.                  
                 
Regards,                  
Easterangel-ga                  
Google Answers Researcher

Thanks for the nice rating and the tip!