![]() Once you add in pay advances for recording costs and other expenses, these companies expect a return on investment. Record companies get a cut of everything that a musician produces, and that’s not a surprise, considering how artists are a risky investment. Unfortunately for new musicians, expensive record labels are often the key to getting an artist's brand out. Selling that same album with an online retailer might mean that a website would get a cut of, say, $2.49, while the artist might gain a cool 75% profit. Obviously, this is the best possible situation, but it's not the best way to reach the widest possible audience. If they sell the physical CD themselves for $9.99, they keep 100% of the profits. Or they can put it on an online retail site which doesn't require musicians to have a record company to sell their music. ![]() If they want to go the more old-fashioned route, an artist can burn their recorded tracks onto compact discs and sell the CDs themselves at performances or on the band's own website. In the music industry's basic form, an artist simply records his/her own music, reproduces it and sells it to others. ![]() There’s no doubt that making music can still pay off big-time, but you might be surprised to see who's really making money from CD sales and iTunes royalties. Look past the musician stereotypes and you’ll see that most receive a tiny fraction of a song’s purchase price. It could be easy to brush off Townshend as a cranky old timer, but does he have a point? Townsend demanded that Apple do more to support musicians, the backbone of their music sales. Legendary guitarist, Pete Townshend once made headlines when he called iTunes a 'digital vampire' that profits from artists – without actually providing support.
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