My newest album “Unfailing Love” releases tomorrow. This is pretty exciting! I’ve always tried to be transparent around here, and I thought it might be interesting to show you all just how much money ends up in my pocket when you buy my music through different outlets. So, here we go…
Initial costs (just to distribute the album)
First of all, let’s talk about some up front costs. I sell my music through two main outlets – BandCamp (both digital and physical sales) and digital distribution through CD Baby. You can also buy the album directly from me at live shows. BandCamp is free to use, and they keep a 15% cut of all sales. They pay me through PayPal, who also keeps a cut (around 2.9% plus $0.30 per transaction). I use CD Baby for album distribution. They send the music to anybody and everybody that you can imagine that sells music online. CD Baby charges a flat rate per album ($60), and then keeps 9% of all sales.
So, let’s look at what happens when you buy (or listen) to my music through different outlets.
Streaming is great and has become huge in the music market. I personally have a Rhapsody account, and for $10 a month, I can listen to whatever I want. Pretty sweet deal. I’ll highlight Spotify and Rhapsody.
When you listen to one of my songs, I take home $0.0011. Sometimes this is less, but $0.0011 is the average. So, if you listen to my new album one time, I make $0.011. You read that right – I make one cent if you listen to the whole album once.
If you listen to my album 100 times (that’s a lot!), I’ll make $1.10. Barely over a dollar.
Say something crazy happens, and 5000 people listen to my album 2 times each. I’ll pocket about 110 dollars. Clearly Spotify is not making the indie music artists much money.
Rhapsody (my listening service choice)
Rhapsody pays out about 9X more than Spotify. For each stream, I take home $0.0091. That’s almost a whole penny per stream! Let’s break it down.
- Listen to my album one time (10 streams), I’ll take home 9 cents.
- Listen through 10 times (100 streams), I’ll make almost a dollar.
- Listen through 100 times (you are quite a fan!), I’ll make about 9 dollars.
- Say 5000 people listen 2 times each, I’ll pocket $910.
Forget streaming – let’s buy the album
By far the most popular music outlet out there. Apple keeps 30% of all sales (they are making lots and lots and lots…. and lots of money). So, after Apple pays 70% per song ($0.69), CD Baby keeps 9%. In the end, I get $0.637 per song download.
Here’s how the numbers work:
- If you buy my album (10 songs) on iTunes, I’ll make $6.37.
- 10 people buy it, I pocket $63.37 (at this point, I’ve made back my initial cost (from CD Baby) to get the album out to iTunes)
- 100 sales: $637.70
- Say those same 5000 people that were streaming the album buy it instead: I’ll make $31,850.00. Not bad!
- What if the album goes platinum? (That’s 1 million sales): $6.37 million dollar payout.
BandCamp – Digital sales
I actually hope you buy through BandCamp. There are fewer middlemen, and BandCamp is just an awesome service and company. Plus, I get to set my own pricing (it’s cheaper for you!).
The new album will cost you $8 at BandCamp. They keep 15%, so they pay out $6.80. PayPal then keeps 2.9% of that, plus 30 cents (per transaction), so in the end, I’ll make $6.30. Notice that’s actually less than I make per iTunes sale. That’s cool – I’d still rather you buy from BandCamp :). So, some numbers:
- If you buy my album (digitally), I make $6.30.
- 10 people buy it: $63
- 100: $630
- 5000: $31,500
- 1 million: $6.3M
BandCamp – Physical sales
I’m selling the physical album on BandCamp for $10 plus shipping. I’m fulfilling these orders myself – no middleman here. The rates are the same, and shipping costs are a wash (I’m only charging what it costs). I’m getting physical discs manufactured with DiscMakers, and 100 of them cost me $257.70. So each disc costs me about $2.57. So for each physical album sale through BandCamp, I take home $5.38 (after DiscMakers, BandCamp, and PayPal take their cut).
- If you buy one, I make $5.38
- 10 people buy it: $53.80
- 100: $538.00
- 1 million: $5.38M (that’s a lot of trips I’ll have to make to the post office!)
Physical sales (at shows, or from me personally)
The only cost to me here is the production cost, so I’ll make $7.43 per album sale. I’m guessing that you’ll probably be able to buy it at a discounted rate live. Maybe $8 is the most I’ll ever charge for a physical copy, in which case I’ll make $5.43, so the numbers would work out similarly to the BandCamp scenario.
How much did it cost to make the album?
I recorded this album almost entirely on my own, so production costs are pretty hard to calculate. I’ll give it a shot, though.
Most of the recording was done using just a handful of equipment and software, including:
- Focusrite Saffire Pro14: I bought this used for about $120
- Studio Projects C1 microphone: Bought this used for about $150
- Shure Beta 58 microphone: Bought this used for about $125
- M-Audio Keystation midi controller: Bought used for about $100
- Apple Logic Pro recording software: $200
- Apple MacBook Pro: not going to include this cost, as most people have a computer anyway, but that’s what I used.
- I hired a drummer and recording engineer (for recording drums) for a few songs: $425 (these guys did great work, and for very reasonable rates)
- Digital distribution (CD Baby): $60
- Copyright costs: $80 (to register all songs with US copyright office)
- Physical album manufacturing (through DiscMakers – 100 albums): $257.70
This number is actually really, really low. There are a few things I didn’t include in this analysis:
- Instruments: Literally thousands of dollars worth of instruments (guitars, etc)
- Other musicians: There are a handful of musicians from the worship team at church who made a significant contribution to this album. It would not be what it is without them.
- Time: Hundreds of hours were spent in the recording of this, plus at least hundreds more spent over the years learning how to do recordings like this. Even more when you consider the time/effort spent writing the songs.
I’ll need to sell about 250 or so copies of the album to cover those raw costs. My goal all along has been to just maybe break even.
Hopefully this was an interesting read for you. There are more and more really talented artists out there making and selling their own music. I think it’s important for the listening market to seek out these indie artists and support them by buying albums, whether it’s through iTunes or places like BandCamp or directly from the artists.