Wednesday, June 16, 2010

How Much Money Does a Musician Make on ITunes?

Apple accounts for 28% of the US music market, and MP3 downloads on Amazon add another 12% -- making it 40% -- still a minority, but it is just two companies.

The financial split between the musician and Apple has never been quite public. Appleinsider thinks that
big labels get a better deal at 70% of revenue and that independents get 60%. The owner of the copyright gets 9%, and this is from the label's cut.  This 70% number is floated a lot, but without good documentation, for example.

Deals between acts and labels vary, but perhaps the label will probably keep half, so the act gets 35%, and the act needs to pay the copyright from that, or 10%. The net could be 25% or $0.25 on a $0.99 song for the artist.

Let's say that I want to make $20/hr on a song that took three people two weeks to make or 240 hours. I would need to make $4800 for this type of wage. Let's say my label took 50%, then I would need to sell 13700 copies to earn $20 per hour.

There are 6-8 million songs on iTunes, and they have sold 10 billion songs. This means that average song has been downloaded 1400 times. However, some songs have been downloaded far out-of-proportion -- millions of times, and some have never been downloaded.

A song would need to be downloaded ten times more than the average in order to make a $20/hr return to its creators. The return would be better if the recording were self-published, perhaps six times instead of ten.

--------------------------See the new update post from October 2010 --------------------------