How much profit do the labels earn?

[indy4 155]

Can anybody answer this question? I'm sure it varies per release, as it probably costs more to get the rights to release certain scores over others, but for the average single CD, after the manufacturing fees, rights fees, royalties to the composer, and re-use fees are payed off, how much money is left for those who work at the labels? And how many people from those labels are entitled to a section of that remainder?

I apologize if anybody is offended by this question - if you are, feel free to not answer it. I'm just really curious as to how much I am supporting the labels each time I make a purchase.

And yes, I am talking specifically about labels like FSM, Intrada, LLL, Varese, etc.

[Josh500 1,615]

I have no idea, but what would interest me more is how much John Williams earns, every time we pick up Family Plot or Home Alone: Limited Edition.

[indy4 155]

Yeah, I'm curious to that as well.

[John Takis 206]

Enough for them to stay in business -- until the day they don't. I suspect that's the best answer you're likely to get to this traditionally impolitic question.

[fommes 154]

Meanwhile, Doug Fake from his private swimming pool: "Tell Johnny Towner that the list for the groceries is in the kitchen."

[Wojo 2,453]

It has nothing to do with matters of politeness. All companies keep track of their costs and revenues by using income sheets, also known as profit and loss statements (P&L). The difference between total revenue and total cost is profit.

All publicly traded companies are required to publish their income statements so that the general public may view them in order to make decisions about the stock market.

None of these specialty labels appear at an investing site such as Yahoo Finance, while other companies such as BP, Exxon, McDonald's, and Sony do. That tells me that the specialty labels are not publicly traded companies, which means their income statements are kept on a need-to-know basis.

Q.E.D.

[Hlao-roo 389]

Can anybody answer this question? I'm sure it varies per release, as it probably costs more to get the rights to release certain scores over others, but for the average single CD, after the manufacturing fees, rights fees, royalties to the composer, and re-use fees are payed off, how much money is left for those who work at the labels? And how many people from those labels are entitled to a section of that remainder?

I apologize if anybody is offended by this question - if you are, feel free to not answer it. I'm just really curious as to how much I am supporting the labels each time I make a purchase.

And yes, I am talking specifically about labels like FSM, Intrada, LLL, Varese, etc.

I think you're a dickhead for posting this.

[Richard Penna 3,772]

I for one am still surprised that the labels can do all this work and still make money from a $20 CD (the 'making money' part is assumed. A business dies if you don't make a profit, simples).

[Ollie 1,069]

I believe someone once mentioned Williams could have retired on the royalties from Jaws alone.

Aside from Lukas, I believe MV was the only one to actually comment on his labels financial status, it's buried over at FSM somewhere.

[#SnowyVernalSpringsEternal 10,265]

James Fitzpatrick has also said that he's never made a profit on any Tadlow release.

[Quintus 5,399]

Am I the only one who finds the this thread's title a bit jarring?

[Ollie 1,069]

Probably.

Although it is stuff I try and not concern myself with. As long as they can keep releasing music, I'm happy.

[BLUMENKOHL 1,070]

The specific labels you mention make smaller profits than say a bigger label releasing the same album on wider scale, simply due to economies of scale. If your production is limited, your production costs rise accordingly. "Buying in bulk" if you will.

Now I'm not sure of all the specific details that FSM or those guys go through, and forgive me for the following ambiguity (it comes along with being able to freely share stuff like this), but the company I may or may not work for releases physical music for our certain type of products through a specific small label that does a lot of that for certain type of products. This is done on a scale similar to what I assume the film score labels do, maybe slightly bigger.

The ultimate cost per full polished ready to release physical album is ~$2, from recording/mixing, licensing, to acquiring UPC from the UCC or GS1 as they are known now. The remainder is gross profit that is split up depending on how the contracts were set up. This means everyone from the resellers to the original artists may/will get a cut of the money made (less ~$2 for the base cost per unit). Depending on which party you are, the sum of all those cuts is your net profit.

That is highly variable depending on how aggressive the contracts are and sales performance.

[John Crichton 4]

I just keep buying and, given recent output, I'm fairly certain the money is being put to good use.

[Josh500 1,615]

I believe someone once mentioned Williams could have retired on the royalties from Jaws alone.

This I gladly believe.

By the time, Star Wars came out, I'm sure John Williams was a multi-millionaire.

Just imagine, JW had stopped composing after Star Wars!

[Quintus 5,399]

He may have been a millionaire, but I'm not sure he'd have been a multi, at that point.

[Taikomochi 1,145]

I think you're a dickhead for posting this.

I'm not understanding why this thread is so offensive...

[John Crichton 4]

I think you're a dickhead for posting this.

I'm not understanding why this thread is so offensive...

It's not, it's just an old running gag that comes back every so often. An appropriate response would be "Yo mamma!".

[Koray Savas 2,251]

Uncool bro.

[Josh500 1,615]

He may have been a millionaire, but I'm not sure he'd have been a multi, at that point.

Oh, he was!

You know that the Star Wars soundtrack was the bestselling non pop or rock album at that time, right? I believe this even made the Guiness Book of Records.

[John Crichton 4]

Uncool bro.

Yes! That was the one I was trying to think of. My brain wasn't working so good last night, obviously.

[Kevin 22]

I'm betting that $9.99 for a $19.99 CD is probably a breakeven point. Especially on those $29.99 just-add-the-original-CD 2 disc editions, the labels are just printing their own money.

[#SnowyVernalSpringsEternal 10,265]

If we take a typical limited release of 3000 by any of the labels (Intrada, Lala Land, Varese, FSM etc...), they sell this release for 19,95 US Dollars. So the most they can make from it, if it sells out is $59850.

This seems like a lot of money, until you realize that this has to cover the costs of the rights, restoration and remixing + mastering of the master-tapes and the enormous amount of paperwork and editing that comes with that job + the actual pressing on the CD, creating and manufacturing of the CD artwork and booklet (which brings it's own costs since this takes a lot of research and sometimes requires interviews), and then storage and distribution costs.

Suddenly it seems like a very small amount of money....

[Kevin 22]

If we take a typical limited release of 3000 by any of the labels (Intrada, Lala Land, Varese, FSM etc...), they sell this release for 19,95 US Dollars. So the most they can make from it, if it sells out is $59850.

This seems like a lot of money, until you realize that this has to cover the costs of the rights, restoration and remixing + mastering of the master-tapes and the enormous amount of paperwork and editing that comes with that job + the actual pressing on the CD, creating and manufacturing of the CD artwork and booklet (which brings it's own costs since this takes a lot of research and sometimes requires interviews), and then storage and distribution costs.

Suddenly it seems like a very small amount of money....

Donning my Accountant hat here.

But if you spread the fixed costs over 3000 CDs, then it doesn't look that big (in average costs).

But look at say 50 releases per year, you are looking at serious revenue (if you put out the right titles).

[#SnowyVernalSpringsEternal 10,265]

But what if they do not sell all 3000?

[BLUMENKOHL 1,070]

The specific labels you mention make smaller profits than say a bigger label releasing the same album on wider scale, simply due to economies of scale. If your production is limited, your production costs rise accordingly. "Buying in bulk" if you will.

Now I'm not sure of all the specific details that FSM or those guys go through, and forgive me for the following ambiguity (it comes along with being able to freely share stuff like this), but the company I may or may not work for releases physical music for our certain type of products through a specific small label that does a lot of that for certain type of products. This is done on a scale similar to what I assume the film score labels do, maybe slightly bigger.

The ultimate cost per full polished ready to release physical album is ~$2, from recording/mixing, licensing, to acquiring UPC from the UCC or GS1 as they are known now. The remainder is gross profit that is split up depending on how the contracts were set up. This means everyone from the resellers to the original artists may/will get a cut of the money made (less ~$2 for the base cost per unit). Depending on which party you are, the sum of all those cuts is your net profit.

That is highly variable depending on how aggressive the contracts are and sales performance.