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How Much Does it Cost to Produce a Recording?

CowboyNeal posted more than 11 years ago | from the dollars-and-sense dept.

Music 820

An anonymous reader writes "How much does the average new album cost to produce? I have seen this cost estimated between $500,000 and $1,000,000, but some quick figuring does not support a cost this high. According to various sources (Ok, Slashdot stories...), somewhere around 27,000 albums are produced each year and 906.6 million albums are shipped. I would guess that the album retail (about $15 per album) is based on a 100% markup, so that these 906.6 million albums are sold at wholesale for about $7.50 apiece, which means that the revenue from wholesale sales is about $6.8 billion. This means that the actual production cost has to be less than $250,000 per album, otherwise the record industry is losing money. I have left out the cost of actually printing and copying the albums as I think that the average cost is probably less than $0.25 per copy."

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ya know (-1, Offtopic)

Anonymous Coward | more than 11 years ago | (#5148020)

how much it costs for a fp? ...a broadband conection. :(

cornjchob

SLASHDOT SUCKS! p.s. I'M BATMAN!! (-1, Offtopic)

Anonymous Coward | more than 11 years ago | (#5148202)

Yeah you heard me, this website is fucking gay! Everyone that reads this site should just kill yourselfs now fuckos! I am hating all of your lifes for you to die! Fuck YOU! I'M Batman, you cracker niggers! @:^) How's your grundle?! Oh and work to mah peeps!

Re:SLASHDOT SUCKS! p.s. I'M BATMAN!! (-1, Offtopic)

darxyde (607706) | more than 11 years ago | (#5148241)

My barely adequate psychic defenses are crumbling.

I can make recordings for free (-1, Troll)

Anonymous Coward | more than 11 years ago | (#5148021)

I just speak (or fart) into the mic connected to my computer and I wind up with a recording!

here it comes.... (-1, Offtopic)

Anonymous Coward | more than 11 years ago | (#5148022)

EEEEFFFFFF PEEEEEEEEEE!!!

Re:here it comes.... (0)

Anonymous Coward | more than 11 years ago | (#5148111)

here what comes? you just shot a blank, kid.

subjective cost (0)

Anonymous Coward | more than 11 years ago | (#5148024)

labels need to get rid of talentless artists and get people with actual creative talent to produce their own shit

Recording cost (0)

Anonymous Coward | more than 11 years ago | (#5148025)

Equipment needed: Samsung T-300 mobile phone.

30 seconds. Press little round button on phone. Listen to methodical female command: begin speaking after the tone.

SPEAK! SING!

Press "ok." Enter a name for your recording.

Cost: zero. Phone can be purchased for $50 on eBay. Works with Telus, Qwest and Verizon Wireless.

first post (-1, Offtopic)

Anonymous Coward | more than 11 years ago | (#5148027)

first post focalhost

fp (-1, Offtopic)

Anonymous Coward | more than 11 years ago | (#5148028)

fp?

blblb (-1, Offtopic)

Anonymous Coward | more than 11 years ago | (#5148029)

blblbl

first (-1, Offtopic)

Anonymous Coward | more than 11 years ago | (#5148032)

jjhubibniugvuyniuguoynoiunbpu

100% (5, Interesting)

xao gypsie (641755) | more than 11 years ago | (#5148035)

is based on a 100% markup

i would guess that the markup is higher than that. it has to be higher than that. most of the cd's i have recently bought were more that $15. it has to be somewhere in the range of 150-250%, especially becuase im sure it ain't getting more expensive to make a cd these days.

xao

Re:100% (4, Insightful)

packeteer (566398) | more than 11 years ago | (#5148105)

All of these numbers are insane anyway. I dont have the ability to check the actual numbers but i know from my economics classes that these seem unlikely. This is simply someone guessing about somehting they probably dont know much about.

Just a guess (5, Informative)

rblancarte (213492) | more than 11 years ago | (#5148117)

I have a friend who did some record production a few years back. Overall his cost of production was never more than $3000 or $4000. That all said, he never had to do the recording or the mixing or any of that. Nor was paying the band part of the deal. Still when we are talking real production cost of the CDs themselves, we are talking dirt for that. When you start talking studio time and the time and effort to mix a CD properly, then we are talking a great deal more.

But still, just looking where I live (Austin, TX) people are able to churn out decent CDs without a huge effort or much money, so when you get right down to it, outside of paying your "talent" we are talking a relatively small figure.

RonB

Re:100% (2, Informative)

MankyD (567984) | more than 11 years ago | (#5148187)

100% markup is way off. Retail stores like CompUSA and Best Buy sell cd's and movies at appproximately a $1-$2 in store. The company warehouses that ship them out to the stores don't make more than a $1-$2 profit on top of that. We're talking $5 markup max.

I would guess??? (1)

lpret (570480) | more than 11 years ago | (#5148037)

You mentioned that you guess that there is a 100% markup. Since that cannot be backed up, havent you potentially just doubled the income?

Inflated prices (1)

yuri benjamin (222127) | more than 11 years ago | (#5148039)

I have seen this cost estimated between $500,000 and $1,000,000

The $500k - $1m is probably a figure given to justify the high cost.

Re:Inflated prices (1)

yuri benjamin (222127) | more than 11 years ago | (#5148060)

I mean the high cost of individual CDs in the store

19" Small? (-1, Offtopic)

natmsincome.com (528791) | more than 11 years ago | (#5148040)

My screens at home as still 15" and 17" We just got a 19" and while I wouldn't call it large (Some freinds have 21") I wouldn't call it small.

Depends (1)

m.lemur (618095) | more than 11 years ago | (#5148044)

On the artist, length of the album, genre of music, technology at your disposal and the number of copies you want pressed.

I've heard of albums being recorded for $500, but didn't Michael Jackon spend $30million?

Re:Depends (1)

m.lemur (618095) | more than 11 years ago | (#5148063)

I have left out the cost of actually printing and copying the albums

Doh, sorry.

IN SOVIET RUSSIA (-1, Offtopic)

Acidic_Diarrhea (641390) | more than 11 years ago | (#5148123)

little boys pay off Michael Jackson!

"but didn't Michael Jackson spend $30 million?"
Well, he's got certain additional expenses to get his creative juices flowing, if you know what I mean.

Re:Depends (4, Funny)

wideBlueSkies (618979) | more than 11 years ago | (#5148146)

>>but didn't Michael Jackon spend $30million?

On plasic surgery and skin bleach, or on his recording?

Re:Depends (4, Interesting)

m.lemur (618095) | more than 11 years ago | (#5148172)

Why, when most industries are using technology to slash costs, is Michael Jackson running up $30 million in studio bills? Or, rather, why is Sony Music letting him?

http://www.wired.com/wired/archive/11.02/dirge.h tm l

From the RIAA story this morning ;-)

uhh (-1, Offtopic)

Anonymous Coward | more than 11 years ago | (#5148046)

wow

interestingly enough... (4, Interesting)

ironfroggy (262096) | more than 11 years ago | (#5148049)

I was just talking to my fiancee about this, trying to convince her of the evils of the RIAA. And, you are very right. It doesn't cost nearly as much as they say.

My uncle was in a band who self produced 500 CDs. Not much but all accounts, but even that was only 2 bucks a CD and that included studio time, equipement rental, editing, and album cover printing. And, of course, in more bulk the price goes down.

Re:interestingly enough... (1)

RocketJeff (46275) | more than 11 years ago | (#5148192)

My uncle was in a band who self produced 500 CDs. Not much but all accounts, but even that was only 2 bucks a CD and that included studio time, equipement rental, editing, and album cover printing. And, of course, in more bulk the price goes down.
And how much did he spend on promotion, shipping, warehousing, returns, making video's for TV, etc. These are all costs that need to be considered. Just look at the $$$ spent on promoting CD's from average bands and making seldom played videos.

So.. (1, Insightful)

damiam (409504) | more than 11 years ago | (#5148050)

Someone does some faulty math based on statistics they found on the Internet, their result doesn't agree with a statistic they found somewhere else on the Internet, and it winds up on the front page of Slashdot?

Re:So.. (2, Insightful)

dextr0us (565556) | more than 11 years ago | (#5148093)

actually its because people are interested in the topic, and its a good place for discussion.

its getting cheaper (5, Funny)

thedbp (443047) | more than 11 years ago | (#5148051)

with large ATA hard drives and digital interfaces for various applications to drive real-world mixers and soundboards becoming cheaper and cheaper, the actual cost of recording, in a real sense is very minimal. A whole setup can be had for $20,000.

Then there's studio time. And paying the engineers, artists, producer, and the entourages of all the above mentioned people. Plus food, limos, champagne, jimmy hats, mini hot dogs, whipped cream, broken instruments, bail, hush money, drugs, alcohol, cigarettes, and there's about $980,000.

So you can see how these things add up.

Re:its getting cheaper (4, Funny)

wideBlueSkies (618979) | more than 11 years ago | (#5148115)

Don't forget the whores, and lawyers.

Or is that whores/lawyers?

Re:its getting cheaper (4, Interesting)

delta407 (518868) | more than 11 years ago | (#5148132)

[It's getting cheaper] with large ATA hard drives and digital interfaces for various applications to drive real-world mixers and soundboards becoming cheaper and cheaper, the actual cost of recording, in a real sense is very minimal. A whole setup can be had for $20,000.
Quite true. I recently did recording (and am currently doing mastering) for a bunch of high school students in a church band -- the recording interface [midiman.net] was $600. The church already had a suitable sound board, the drummer had a suitable set of drum mics, the guitar player had enough cables to strangle an elephant, and someone had a basement we could use.

In all, we spent $600, but the total equipment value came out to somewhere around $4,000. The production process (250 copies) will run about $2.50 per CD (with labels and everything), and the final CDs -- covering all production investments and the price to produce the final copies -- will be sold for $10 each. Oh, and it sounds halfway decent [visi.com] , even after only half an hour of tweaking earlier today.

Re:its getting cheaper (2, Funny)

Anonymous Coward | more than 11 years ago | (#5148147)

i liked the way the poster used the inner-city slang "jimmy hats" so as to suggest that either he or people with whom he worked closely were both hip and getting laid on a regular basis.

Average? (4, Funny)

Daleks (226923) | more than 11 years ago | (#5148055)

While your numbers may hold true for the average, it obviously takes less money for the likes of William Shatner [amazon.com] or David Hasselhoff [amazon.com] to produce an album than U2.

Re:Average? (3, Funny)

ez76 (322080) | more than 11 years ago | (#5148163)

While your numbers may hold true for the average, it obviously takes less money for the likes of William Shatner or David Hasselhoff to produce an album than U2.
... and standard deviation was born.

Re:Average? (5, Funny)

davinciII (469750) | more than 11 years ago | (#5148176)

it obviously takes less money for the likes of William Shatner [amazon.com] or David Hasselhoff [amazon.com] to produce an album

Seriously? Do you know how much money it costs to make a David Hasselhoff record even remotely listenable?

What about the middlemen? (2, Interesting)

Anonymous Coward | more than 11 years ago | (#5148059)

There are so many middle agencies picking away at profits, that the average royalty per _song_ sold works out to about $0.05 to $0.07 cents.

That doesn't actually cover the cost of recording the music, which is usually fronted by the label to the musician as a _loan_.

Most musicians (John Fogherty for example, in CCR) get screwed so badly by the record co. that they lose all rights to their own music...

The delusion of Ferraris and Supermodels is manufactured. In reality it's barely enough to stay alive.

It depends on the artist (5, Interesting)

Blackbox42 (188299) | more than 11 years ago | (#5148064)

It all depends on who you are and how much you are expected to return. Average big name record companies spend about 100,000 to produce and advertise for a new group. Smaller companies can do the same from anywhere from 5,000 to 15,000. The advertising for an album cost more than the production and has a greater return on the investment.

i got a protools (1)

dextr0us (565556) | more than 11 years ago | (#5148067)

I got a protools basic setup for about 40Gs, and i convinced my "label" to buy that, and build a studio out of an office. To the label, my time is free. its all about advances (which i dont ask for) and stuff of that nature, plus a producer (which costs most of the money).

Not that much (5, Informative)

spankalee (598232) | more than 11 years ago | (#5148070)

Maybe the big name spend that much becuase they get costly producers and waste studio time getting all coked up, but my band was able to record 3 albums for an average of $2000 each.

Reproduction costs are higher though. Especially for nice packaging, like cardboard cases or multipage inserts. We got a great deal and it was still $1 per CD.

For $250,000 you could build your own studio and still hire a good engineer and producer... and get 5000 copies made. Markup is way more than 100%, I believe most of it goes into marketing and "artist development"

250,000 is too much (5, Insightful)

inepom01 (525367) | more than 11 years ago | (#5148074)

It's not NEARLY that much. The $15 price is not a 50% markup from what it costs to produce. There are distribution costs that you are forgetting. Making a CD is really not that expensive. It all depends on what kind of music and how much of their own recording the band does: you can record the whole thing in your apartment and just go to the studio to mix, which will lower your cost considerably. You can have your CD for about $4,000 probably. Why do your CDs cost $15? you are paying for the PR and everything... There's a whole pyramid of people between you and the artist. Also, 90% of bands never really make money so the remaining 10%, whose CDs you actually buy, have their CDs' prices jacked up.

Also, everything is getting cheaper. Things like mixing are moving towards being done on a less and less expensive PC. A Mac with ProTools can do a LOT these days.

AVERAGE $500k+? (2, Insightful)

Trep (366) | more than 11 years ago | (#5148075)

I have no doubt that a lot of "big label" albums go into the million dollar range, but I would have a hard time believing that's the average.

Plus, there are other ways to bring in cash besides CD sales. Royalties for radio play, soundtracks, etc, Concert sales (due in part to marketing of CDs), and plenty more I'm sure.

In any case, I bet >500k production costs are the exception, not the rule. Although, if you include marketing costs as well, it probably jumps up a lot.

Jeff

Re:AVERAGE $500k+? (1, Insightful)

Anonymous Coward | more than 11 years ago | (#5148137)

You guys seem to totally forget the money the band makes. If they are a successful band they have to be at least getting a living wage. Say 40k * 4 band members =160k right there. How many successful bands put out more than one album a year? I am obviously not talking about HUGE successes as they obviously make more than 40k a year.

If someone is a full time musician and is able to sell a decent amount of albums they are going to be paid at the very least enough to eat and pay the rent. As always wages are the highest expenses.

Re:AVERAGE $500k+? (0)

Anonymous Coward | more than 11 years ago | (#5148235)

Finally a sane comment. This is the only comment that hits the real point. Of course this post will NEVER get modded up as most of slashdot is GPL commies who think no one should be paid for their hard work.

Faulty premise (5, Insightful)

Golias (176380) | more than 11 years ago | (#5148077)

You are operating from a faulty premise, which is that the record label must recover their production costs from sales.

The truth is that most of the production costs are paid by the artist. With a new artist, the label fronts the money to produce the album, to be paid back out of artist royalties.

One of the big complaints of artists, which several prominent performers have pointed out before, is that they can almost never repay all of these costs from their first album, unless they are one of those rare acts which goes platinum with their debut. Most acts are then pressured to rush a second album, as cheaply as possible, to increase their revenue to pay off the production costs of the first album and get them into the black. (Hence, all those infamous "sophomore slump" albums.)

In other businesses, this practice is called "loan sharking", but it's the way the record industry has worked for decades, and there's no sign of stopping as long as this business model continues to work.

Re:Faulty premise (5, Informative)

revividus (643168) | more than 11 years ago | (#5148206)

That's right, I was hoping somebody would point that out. A good description of this process has been made by Steve Albini, in Some of your friends are already this fscked [indiecentre.com] .

Faulty premise # 2 (4, Insightful)

Erris (531066) | more than 11 years ago | (#5148210)

Don't confuse what someone spends doing something with the cost of getting something done. Money made by music lables funds things that have little to do with making music. "Promotion" is a vauge cost term added to contracts that can be anything and certianly includes Rosen's golden parachute. Courtney Love pointed out in her "numbers" essay. If a band makes any money at all, suddenly "promotion" costs come out of the woodwork. The Artist rarely makes more than $40k/year after expenses are taken out, while the publisher pockets millions.

The actual costs seem to be what this article has in mind. Most people know what it costs to press a CD and wonder how that $0.25 turns into $20. We also imagine that musicians already own their instruments and have something to record. As you seem to know so much about what's going on, could you detail some actual recording costs for us? Like, what does it cost to rent a studio? Where do we get this outrageous half a million dollar figure from?

Snifzzle to the Nizzle (-1, Troll)

Anonymous Coward | more than 11 years ago | (#5148079)

*_g_o_a_t_s_e_x_*_g_o_a_t_s_e_x_*_g_o_a_t_s_e_x_*_
g_______________________________________________g_ _
o_/_____\_____________\____________/____\_______o_ _
a|_______|_____________\__________|______|______a_ _
t|_______`._____________|_________|_______:_____t_ _
s`________|_____________|________\|_______|_____s_ _
e_\_______|_/_______/__\\\___--___\\_______:____e_ _
x__\______\/____--~~__________~--__|_\_____|____x_ _
*___\______\_-~____________________~-_\____|____*_ _
g____\______\_________.--------.______\|___|____g_ _
o______\_____\______//_________(_(__>__\___|____o_ _
a_______\___.__C____)_________(_(____>__|__/____a_ _
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e_____|___(____C_____)\______/__//__/_/_____\___e_ _
x_____|____\__|_____\\_________//_(__/_______|__x_ _
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They forgot to mention... (2, Funny)

NanoGator (522640) | more than 11 years ago | (#5148084)

... bailing the artists out of jail.

Hmm, this comment'd be funnier if we were talking about the Portland Trailblazers.

Who really uses the subject line anymore? (1)

Bisifiniti (635115) | more than 11 years ago | (#5148085)

Probably not more than $1,000 if you rent a studio and distribute it on p2p.

What's in the $500k? (1)

dauvis (631380) | more than 11 years ago | (#5148086)

That probably includes costs for promoting the record so the actual production might be less. Also, concerts should play into the revenue generated by the album (isn't this where most of the money is made?)

Cost (3, Interesting)

Digypro (560571) | more than 11 years ago | (#5148088)

The cost is similar to the cost to produce a movie..the studios and equipment have already been bought and paid for, so the conglomerates can bill themselves whatever ridiculous amount they feel is neccesary, so they can then steal the "cost" from the artist when their record sells. I don't know how a why this system is still around, but I don't see it changing anytime soon. The actual cost to record and album can be just about anything, you can make "professional" quality sond on just about any PC with a variety of software..and many "artists" do just that, especially dance artists. Just about every beat you hear in a hip hop song was or can be made on a sampler that cost less than $3,000 USD. The Wu-Tang clan is a prime example, they produced their first album for next to nothing!

He forgot something (1)

tuxlove (316502) | more than 11 years ago | (#5148089)

What about the cost of advertising and promotion? I've heard those are the biggest costs in producing and selling an album, and dwarf the cost of actually recording the album itself.

recording costs (0)

Anonymous Coward | more than 11 years ago | (#5148092)

The cost of actually recording the album can be anything from a few thousands to a few tens of thousands of dollars. However, once you start to talk about promotional expenses, advertising, licensing songs from publishers, business overheads, videos(!!!) that can skew the numbers totally.

There's also a vast difference in the equipment used on different albums; it's quite possible nowadays for a couple of skilled people to put together a top-40-quality album with less than $10,000-worth of equipment, but many of the top studios have $millions-worth and cost $thousands per day to hire.

Hrm.. depends.. (1)

sporty (27564) | more than 11 years ago | (#5148094)

I can buy a mic and plug it into my computer. As time goes on infinitely, the price per recording, per minute, drops infinitely too :)

Markup Higher? (1)

kirn_malinus (159763) | more than 11 years ago | (#5148095)

I seem to recall hearing once that CD wholesale to retail markup was quite a bit more than 100%. Perhaps as high as 400% even I want to say.

Depends... (4, Insightful)

cornjchob (514035) | more than 11 years ago | (#5148099)

the cost of an album depends considerably on what you're trying to do, and who you are. Assuming you're in a small band (like myself), an album will usually cost maybe $600 just to record and master, and then another $2000 for a good amount of copies in cd and tape. This doesn't add a lot of frills, especially in the recording process; not much can be done on a budget such as that, like studio musicians and really nice effects and what not. But then again, you could get a bunch of buddies to do anything special on your album, and that'll usually work. Or, you could do it with less quality for even less money, or record it at home. But for some professionalism, thats the way to go, and it'll usually run between $2000 to $3000.

For big business music, however, several thousand dollars are spent. The average is raised a lot due to how many effects and how much processing goes into making pop music. Britney doesn't hit that note? Touch it up with several thousand dollars worth of software (if you're legit ;) and special hardware and a technician that's expensive as hell. Plus, with all the processing, even more goes into it. Producers at that level are also hella expensive, further jacking up the price. And studio musicians are expensive as hell.

But the bottom line here is it depends on what you meant: Major recordings or a bunch of bumblefucks like myself on a budget.

I don't think my nephew's band had $1million... (1)

brassman (112558) | more than 11 years ago | (#5148100)

and they've [sindacato.com] produced two or three kick-ass CD's so far.

Re:I don't think my nephew's band had $1million... (0)

Anonymous Coward | more than 11 years ago | (#5148157)

No, they haven't.

Re (0)

johann909 (241219) | more than 11 years ago | (#5148102)

Dont ask stupid questions

Electronics and computer industries to the rescue (0, Offtopic)

ShatteredDream (636520) | more than 11 years ago | (#5148106)

It's only inevitable that Apple will own most, if not all, of the good production tools. They'll figure out a way to make them easier to use and who knows, maybe they'll eventually build custom boards for PowerMacs that can turn them into a MIDI controller.

On that note, the group most likely to keep Microsoft from dropping MacOffice is its stockholders. They don't see Apple as a threat, they see its userbase as a great source of revenue for a major stock in their portfolio. Unless revenues on MacOffice collapse, MS execs will be roasted if they drop it. All the while, Apple quietly builds up its portfolio of music/movie production tools.....

small runs aren't very costly. (1)

spazoid12 (525450) | more than 11 years ago | (#5148108)

A buddy did an album 5 years ago. He got many things cheap (friends doing guitar, drums, production, etc for cheap...I did the graphics for free). His run was small...maybe 1000 CDs and 500 tapes. I seem to remember him saying the whole shmear cost him about $5k. Not just duplication...all of it. That's about the time he got married and so it was certainly not a huge cost.

It ended up being quite good. Also, that duplication included full-color silkscreen on the disc and a full-color 6 page trifold insert.

I remember he wanted to have a track without a number (kinda like on Tom Petty's Full Moon Fever), but at the cheaper price he went with the duplication house didn't offer that kind of thing.

Cost... (1, Flamebait)

idontneedanickname (570477) | more than 11 years ago | (#5148110)

One CD Burner [newegg.com] - $57.99

50 CDs [newegg.com] - $12.00

Audio Editing Software [syntrillium.com] - $249

Studio costs - However much you pay for your rent

Total: ~$500'000
Those maths skills sure come in handy!

cost way over inflated... (3, Interesting)

z-kungfu (255628) | more than 11 years ago | (#5148116)

...back in the 80's when CDs 1st appeared they were more expensive than albume, even though they cost LESS to produce. The record industry said once the cost of tooling was paid for cost would go down, they lied... Even in a pro studio you can record an album for way less than $100k. The rest of the supposed cost goes to marketing and promotion, which is a bunch of BS. The record companies are bigger crooks than Enron... I see 1000 CDs regularly for just over $1k w/ packaging....

record budgets are very low now. (0)

Anonymous Coward | more than 11 years ago | (#5148119)

in the mid 90' when all of my friends were getting signed and dropped as fast as the ink could be spread out on the contracts, it was common to get a $250,000 thousand dollar record advance. these advances are of course recouped entirely before the band sees any mony and generally went to the producer.

higher budgets were not uncommon.

today theings are different. A&R guys are more careful - if they don't get a hit in 6 months their careers are pretty much over..they get less money than they did 5 years ago - say 40,000 on average.

a studio i work at when i'm in nashville just cut rates from 2200 per day to around 400 per day.

there are a million speculations we could make about why this has happened, but one of the big factors is the feasability of releasing a record recorded entirely on a computer - evereyone and their broher has a home studio these day, and the tiny budgets they get go into building up - this has also had a devastating effect on san fran's massage parlor community, that once thrived on desperate looking guitar players looking to blow off some steam between traking sessions at the Pilgram...

kp (-1, Offtopic)

Anonymous Coward | more than 11 years ago | (#5148120)

kike post [goatse.cx]

The biggests cost... (5, Interesting)

Faeton (522316) | more than 11 years ago | (#5148121)

is never the printing, S&H, recording or any of that. It's *always* the marketing (I'm including music videos). Companies spend millions pushing their music onto MTV, MuchMusic (Canadian variant) and radio stations.

A music video, a self-contained commercial for the album costs a LOT of money ($100k up to $500k), without actually bringing any money in by itself (except for the growing trend of musicvid DVD's).

Everytime you watch a music video or listen to the radio, that's marketing money spent just to get you to buy the album. For people that want to go big-time, you gotta shell out the big-bucks. That $20 you pay for the CD pays for pretty much every method that got you aware of the CD in the first place. Except for word-of-mouth, which to marketers, is priceless (which it is, since it's free).

Recording Costs depends on the "artist" (5, Interesting)

ryanw (131814) | more than 11 years ago | (#5148122)

Standard recording costs range between $40 on up to $200 or $300 an hour depending. But an average joe could record at a high quality studio for about $60 an hour. Depending on how good the band is you could do a whole album in one week at 12 hours a day. Thats $3,600.00 in recording costs. About another week to mix the album at 12 hours a day. Another $3,600.00.

Mastering of an album costs about $4000.00 at Gateway Mastering. Thats the best place in the world. CD Duplication for color inserts and other things it's about $1.00 each.

So it's like $12000.00 for recording, mixing and mastering and another $8000.00 for 8,000 cd's. So now we're upto $20,000.

But now you gotta' pay the "independant promoter" companies (which are subsiderary companies to the radio stations) lots of money to get it played on the radio. Thats an extra $10k.

So a total of $30,000 for a good band to pound out a great CD.

Re:Recording Costs depends on the "artist" (2, Interesting)

Compuser (14899) | more than 11 years ago | (#5148198)

So not counting promos, it is $2-$3 per CD for small to medium size runs. That's exactly the range everyone else in this thread is giving, meaning the markup on a typical $20 CD is around 10X, or 1000%. I wonder what other industry has such enormous profit margins.

And how long (1)

timeOday (582209) | more than 11 years ago | (#5148129)

is a piece of string?

Prod cost doesn't bother me a whole lot... (4, Insightful)

NanoGator (522640) | more than 11 years ago | (#5148134)

I don't really care how much the markup is on a CD. That's not an issue with me. If it costs them a penny a CD, and they sell it for $15, that doesn't bother me one bit. The truth of the matter is that they're charging what people are willing to pay, not based on what they actually cost to make.

What does bother me is their reluctance to satisfy me as a customer. If an album sucks, I want a refund. Forget it, open it == bought it. They don't even want me sampling the music to alleviate their no returns policy. The way I see it, if they're going to charge a premium for this crap, shouldn't I become a happy customer?

So yeah, they can charge what they want as long as I find the price reasonable, but I demand better customer satisfaction if they're getting such a ridiculous markup on it.

Re:Prod cost doesn't bother me a whole lot... (1)

wideBlueSkies (618979) | more than 11 years ago | (#5148181)

>>They don't even want me sampling the music to alleviate their no returns policy

It seems that they're trying to address the sampling issue. Every music and bookstore I've been in over the last year has a couple of those fancy-schmansy scan the barcode and listen to the CD through headphones machines.

The sample box (as I call it) has kept me from buying more than one filler-filled CD/non standard music disk/whatever.

Inflated numbers (1)

PetWolverine (638111) | more than 11 years ago | (#5148135)

Where did you get the $.5-1 million figure? I'd bet the RIAA invented those numbers to aid them in their fight against piracy and fair use.

[Posted using a dual 1.25 GHz Power Mac running Mac OS X Server 10.2.3 and serving up 60 gigs of music to whoever wants it. Visit ftp://louise.dhs.org/ [dhs.org] for more details.]

Well, I recorded my album for around $4,000. (1)

The Gline (173269) | more than 11 years ago | (#5148140)

That's including the cost of mastering and whatnot -- most of what I needed what stuff already lying around. The do-it-yourselfer ethic is really making home recording take off, especially considering the level of technology available to a consumer now.

Get it here. [amazon.com]

How do you figure? (1)

ramdac (302865) | more than 11 years ago | (#5148143)

"I have left out the cost of actually printing and copying the albums as I think that the average cost is probably less than $0.25 per copy."

906.6 Million (records) * .25 is a pretty hefty chunk of change.

At my estimation, that's about $226,500,000 dollars.

Those albums take quite a bit more than that my friend.

Wake up call.. (1)

destiney (149922) | more than 11 years ago | (#5148144)


When will all the famous musicians of the world realize how bad they're getting screwed by the recording industry?

A cheap pc plus some even cheaper recording software is all you really need. Add a webpage and simple e-commerce script to sell copies of the music, by the song or by the album.

I got plenty of friends who have told me in all honesty they would indeed buy digital music by the song online. Why do all the world's greatest musicians and bands think they need anyone? If the music is good, it will sell. Honest people will buy it.

All the musicians have yet to realize it's a whole new world now, they have to adapt to the capabilities of the internet. Resistance is futile as far as I can tell..

What does this $500k to 1000K actually cover? (1)

HillBilly (120575) | more than 11 years ago | (#5148150)

Is it just the recording of tracks, punching them to CD's and putting them in fancy packaging?

Or does that also include video clip, advertisment, and paying your way to the top of the charts? I hope not, when I pay for a music cd, i'm paying for a copy of the tracks, not the added bullshit that does nothing for me.

hooray! (0)

Anonymous Coward | more than 11 years ago | (#5148153)

Time for another round of "Idiot Slashdot Reader
Yanks Numbers From Ass While Smoking Bong And
Sitting Around With Other Idiots Contemplating
The Universe In Their Navel"!

$25,000 (2, Interesting)

Jason1729 (561790) | more than 11 years ago | (#5148158)

$5,000/hour to rent studio time * 4 hours, and another $5,000 for post production work.

Jason
ProfQuotes [profquotes.com]

From the Producer of In Utero (2, Informative)

Pave Low (566880) | more than 11 years ago | (#5148160)

The Problem With Music, By Steve Albini [negativland.com] breaks down the actual costs involved in producing and the profits.

A must read for any band about to sign a contract with a label, and an interesting look behind the curtain from an insider.

Do you like Mr. Wizard?? (-1, Offtopic)

Anonymous Coward | more than 11 years ago | (#5148161)

Mr. Wizard was great - I like science.
If you like science you should tell Mr. Wizard, the REAL mr. wizard...no...he's not dead...
Mr. Wizard IS Don Herbert

email me and I'll let you contact him.
mrwizardfan1@yahoo.com

Costs can be huge. (5, Informative)

saddino (183491) | more than 11 years ago | (#5148162)

My band [yumahouse.com] released our second CD (right before getting signed alas) independently and the seven songs on it (about 30 minutes worth) cost us about $15K of studio time. Note that this was a no-name studio, with a no-name engineer, and self-produced. We've known small bands that have been signed to semi-majors, and even a somewhat-known producer, engineers and studio time can easily cost $250K. I imagine top quality studios, engineers and producers cost much more.

And, if the label thinks you might actually move some units, they'll be paying expenses, per diems, touring costs and marketing. Believe me, that can cost a lot of $. Fact is, it costs a lot of money to put together a "best-seller."

FYI, signed bands actually pay for the recording costs (the money is "fronted" by your label) so the studio only pays if the album doesn't break even (most albums actually) -- and if the band never generates sales to cover it, the label will eventually eat the cost, but even in those cases it's a write-off

You would be surprised how many bands you know that have never made a dime from royalties because they owe their label for the recording costs. Hopefully most signed bands are smart enough to know that the only money they'll likely see is from sales of schwag.

making an album is pretty cheap (1)

doctor_no (214917) | more than 11 years ago | (#5148166)

making an album is pretty cheap. . .

all you need is:
1)Talent
2)several grand to rent out a recording studio for several hours to record (depends on the studio)
3)several more grand to reproduce the CDs/LPs for distribution (varies depending on how many you plan to sell)

PLEASE NOTE: This doesn't include advertising or hiring Spike Jonze to make your video for MTV, nor the Bentleys to boost the artist's ego, nor the cost of the "Bling-Bling".

Classic Steve Albini Article (5, Informative)

cmcguffin (156798) | more than 11 years ago | (#5148168)

Steve Albini wrote a classic article, The Problem with Music [negativland.com] , on the financial shenagins pulled by the record industry.

The article demonstrates how a band can manage to generate millions of dollars of profit for a label, but still owe the label money.

The article includes sample figures that indicate 'recording costs' of $150,000, and a wholesale price of $6.50 per CD (circa 1994, when the article was first published).

they are losing money (0)

Anonymous Coward | more than 11 years ago | (#5148174)

This means that the actual production cost has to be less than $250,000 per album, otherwise the record industry is losing money.

Don't you get it? They are losing money. That's why the record labels are crying foul and ol' Tommy had to go.

don't forget the legal fees (1)

sssmashy (612587) | more than 11 years ago | (#5148175)

IANABSMIL (I am not a blood-sucking music industry lawyer), but I would guess that about $0.15 per copy goes straight to those wonderful legal minds who draft the contracts and enforce the copyrights. The money that pays for their kids' braces doesn't just pop out of thin air, you know.

Mod this down if you must.. (1)

Gyan (6853) | more than 11 years ago | (#5148180)

but there's this "cost calculator" on the net for publishing an album.

A google doesn't show anything familiar.

IIRC, you need to gross a million dollars just to recieve ANY royalties towards your own pocket.

All the money towards production is a "loan" from the producers towards your effort.

Look at that math! (4, Funny)

The_Rippa (181699) | more than 11 years ago | (#5148183)

Man, I almost went blind reading that.

On the other hand,

if a chicken and half lays an egg and a half every day and a half, then how long does it take a monkey with a wooden leg to kick all of the seeds out of a dill pickle?

Promotion costs big $$$ (1)

blake213 (575924) | more than 11 years ago | (#5148190)

You're forgetting promotion and advertising. And yes, most labels do lose money on artists. But they have a few big money-making artists (Britney Spears, J-lo, and the sort) that make up for most of their lost money.

A good book to read that covers this topic is Tim Sweeney's Guide to Releasing Independent Records [amazon.com] by none other than Tim Sweeney.

A Big Fat "It Depends" (2, Insightful)

xanthan (83225) | more than 11 years ago | (#5148194)

It really depends on the band, their needs, their own access to equipment, etc. Electronic artists, for example, can completely produce their own CD from each song to the final track layout without having to touch a studio. Many well known artists such as Fat Boy Slim are almost entirely done in their basements, etc. In those cases you're looking at about $20-$30k worth of gear from start to finish. DJ's have it even easier -- my setup, including the computer and legal (yes, I paid for it full price) software amounted to about $4000.

Artists that actually need a sound studio are in for paying a lot more because it takes a lot more people to actually make things happen, along with space, equipment, etc. Get into bigger acts and you're talking about a lot more expensive people too since "my cousin who did the high school play audio" isn't going to be the same guy who mixes down a Top 40 album.

What kind of album? (1)

Jon-o (17981) | more than 11 years ago | (#5148208)

There are lots of kinds of album. Sure, the latest Britney Spears probably cost $1000000 to make, but not all musicians are Britney (thank God)

A friend of mine recorded a CD last year - don't know the exact cost, but I VERY much doubt she spent even $1000 (Canadian) for production. She printed a couple hundred of them, sold them all herself (word of mouth and selling at concerts + busking, mainly), and has now printed up a new batch.

Now, it's not a "professional" recording, but all things considered, it's damn good - better than most professional ones for sure.

It's never appeared in a major store, but why should it? This is the sort of recording that we could use more of, instead of the billions of overproduced things that are out there.

And compared to the games industry? (1)

frankthechicken (607647) | more than 11 years ago | (#5148209)

I take it the reason behind trying to find production costs are to attempt to campaign for cheaper music CD's (could really use this in the UK, considering most are released in the £15 range). However it is usually hard to factor risk into the retail cost.

In a similar veign there was a campaign by fairplay [fairplay-campaign.co.uk] in the UK to try to get cheaper video games factoring in production costs to arrive at a fair price for games. Coming to the conclusion that cheaper games related to increased sales.

I sort of feel that charging slightly higher prices allow more risky/niche acts or games to be released, allowing both the mass market to prosper and the more off-beat market to exist. Rather than the business taking the risk of few sales for less money

well.. (0)

Anonymous Coward | more than 11 years ago | (#5148212)

people likes us produce it for the sake of it, the record company gives us $50,000. and that's it.

Slashdot stories? (1)

dave_mcmillen (250780) | more than 11 years ago | (#5148216)

If the poster's sources are mainly Slashdot stories, then he/she is presumably aware that the RIAA makes albums from the blood of children, while evicting widows and orphans from their homes and removing the fingernails of musicians for amusement.

In fact, a more balanced view would be that the RIAA does only some of these things, not all of them.

(Yeah, yeah, the RIAA doesn't make albums at all, it represents people who do. But just try working that into a feeble joke.)

Quality and Fees (2, Insightful)

Daetrin (576516) | more than 11 years ago | (#5148221)

Listen to how different a band sounds on its CD, and how it sounds "unplugged." In many cases there is a huge difference in the quality of the music.

A high quality (ie expensive) studio with high quality engineers and high quality software and equipment can make a decent singer sound good, and a good singer sound great. That's where a big chunk of that change is going.

Another big chunk is probably inflated values given by the RIAA in order to milk as much money out of the artists as they can in fees.

JET (1)

Homerew (149183) | more than 11 years ago | (#5148225)

ok ... stop looking at the artist and start looking at the companies that the artist work for. the band doesn't fly on the warner brothers jet, the warner brother's execs do. the bands don't live in bel air, the execs do. the bands don't give away 400 tickets for their shows, the execs do. what does all this mean? except for a very rare occurence when an artist becomes a mega start and it really is mute who gets what share, most bands live on very little and the execs take the spoils. do your research, this is true.

Where's the beef? (0)

Anonymous Coward | more than 11 years ago | (#5148226)

If you understand the whole process, you understand where the money actually comes in. It's true about the cost...you spend months in the studio recording, doing overdubs, mixdowns, mastering, and the finally the pressing.

The cost is very high. And yes, the numbers don't add up. Your initial estimate is about right. It does cost a lot of money and most of it isn't returned by the sale of the CD initially. Maybe if it's something like "Hotel California" which keeps selling for years, you actually start making money on it.

There's another part of the industry people often forget about since it's not quite the same thing when you're an amateur. Live shows...that's where the money is recouped.

Whenever an album is released, the band goes on tour. The high cost of the concert ticket partially makes up for the costs. Granted, a lot goes into the payment of the 100 or so people on the tour and the equipment they use. The audio consoles cost well over $100K a piece. True, you can get a Mackie for 7 grand, but it doesn't really cut the mustard for this. The moving lights are easily at a minimum 5K each. The trucking...whew...don't get me started. It's expensive, but, it pays for the costs of the recording.

After all that, if you're lucky, you make enough to pay back the record company for paying your bills while you were recording the album. If not, it was probably your last.

Now, if you ever want to see anything from all your efforts on tour and in the studio, hopefully, a few people actually bought the CD and you get paid a few pennies which get added to your bank account. Unless you're one of the superstars, there won't be a lot of those pennies.

So I guess we should all boycott the recording studios and touring (lighting and sound reinforcement) companies since they are causing the prices at the local stadium/arena/club to be so expensive. God forbid someone actually make a living in this world.

The margin is more than you thought, but... (1)

jsse (254124) | more than 11 years ago | (#5148237)

I would guess that the album retail (about $15 per album) is based on a 100% markup

It's way more than 100% markup.

My friend who produces CD for games and music, etc. told me that the cost of producing a CD with packaging material is around US$0.5 each(his factory is in China, but he received a lot of orders from US).

This is the cost of production alone. This doesn't include the cost of producing music, royalty, designing packaging material, agents' commission, bribe to RIAA for price-setting and artists' drugs and legel fees. However, he told me that the combined cost seldom exceed $5 in each CD.

So the rest $10 goes to evil capitalists' pockets? Well may be, but most of the time they are spent on advertising. The money earned from albums is usually spent on advertising for newer signers. Sometime a company might spend more on advertising to promote a new singer; but in this case the signer will have to sign a relatively long-term contract to make up for the initial investment. E.g. most of the profit from concerts and commercials will go to the company within contract period.

C'mon, there can be lots of extra costs (2, Interesting)

Junks Jerzey (54586) | more than 11 years ago | (#5148240)

Sure, you *can* record something in your basement recording studio, and these days it can be pretty good, but it's easy to see where higher costs can come from:

1. Bringing in a well-known producer to help you get the sound you want. Ditto for engineers.
2. Studio time in the high-end studios--with millions of dollars in equipment--can be very expensive.
3. Spending lots and lots of time in the studio--weeks or months instead of the "4 hours" people are citing. Heck, you'd be lucky to get one good take of a song in four hours, even in your basement studio.
4. Session musicians brought in for various tracks.
5. Celebrity backup singers (e.g. Emmylou Harris and Gillian Welch singing backup for Steve Earle).
6. Weeks of production work done by someone else, often someone well known and highly compensated, after the initial recording sessions.

Yeah, local bands don't do all of this, but we're talking about big "cash cow" acts here, not a bar band from Austin.
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