How Recording Artists Make Money

But record companies can place CDs in thousands of locations worldwide that independent musicians cant touch. Record companies make money by marketing and investing heavily in their products in this case the product is the artist their music. Artists can receive 10 15 of suggested album retail minus packaging costs.

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Record labels pay two royalties.

How recording artists make money. For large labels the average cost can be from 100K to 500K and up. For example record labels pay a mechanical royalty to a songwriter every time they reproduce and sell a CD of their music. To learn more check out our section on How Mechanical Royalties are Calculated.

Mechanical Royalties are usually paid out by your record label if you are signed or through your music distribution service if you are independent. One to artists and another to composers publishers. For smaller labels recording costs average 15K per album.

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