RE: Labels

From: Dirk van den Heuvel (dirkv@groovedis.com)
Date: Fri Jun 16 2000 - 18:56:19 MET DST

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    I can assure you many, many labels lose money on certain CDs. However, the
    majors aren't just labels they are also distributors. Operating as
    distributors they never lose money...whatever they sell they take a
    percentage, whatever gets returns they take a fee, whatever doesn't sell
    they return (or destroy!) at the label's expense. So for example MCA may
    lose money on a CD but Universal (MCA's distributor and part of the same
    parent company) can't. How does a label lose money--spending more than they
    can recoup. Either by paying a large advance, overspending on promotions or
    marketing, making too many CDs that don't sell, etc. In many cases ON PAPER
    the artist(s) will actually owe that money back to the label and if they
    keep recording for that label the money will be deducted from future
    payments...however, if the band is dropped or never makes back that money (a
    common occurrence) the money is lost. You never hear of a label trying to
    get its advance back..(they will take the money from your next record..but
    they won't ask for a check :)

    Dirk van den Heuvel (dirkv@groovedis.com)
    Groove Distribution
    http://www.groovedis.com
    Your Guide To The Underground

    -----Original Message-----
    From: angedella isafella [mailto:notmusic@hotmail.com]
    Sent: Friday, June 16, 2000 3:14 AM
    To: acid-jazz@ucsd.edu
    Subject: Labels

    Dear list: I heard that labels rarely ever lose on a cd. After all the
    artist is charged for everything.If an act is dropped its only because the
    label felt they could earn a HIGHER return off the same effort invested
         elsewhere plus there is the issue of scheduling [plant time for A
    versus B. baby bands always make the labelmoney. superstars with big
    advances Can lose on the huge advance. Then again the label can carry an
    item for years > the Blue Note catalog has earned its cst back by the time
    they moved it to cd.
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