The Music Industry Chalkboard: The Numbers That Matter

In business, knowing the financial side of things always puts you at an advantage. In the music industry, there is no difference. A lot of money is made, but a lot of money has to be passed around. I know your music is hot and that you have it all figured out. You are going to get yourself a deal with a
major record label, they are going to give you a one million dollar signing bonus and you are going to be rich. Let me educate financially on how that one million dollars is broken down before you can call it your own.

+$1,000,000 in income

- $150,000 for talent managers (standard 15% fee)

- $100,000 for agents (standard 10% fee)

- $50,000 for business managers (standard 5% fee)

- $50,000 for entertainment attorneys (standard 5% fee)

- $200,000 for various production expenses (20% fee)

This leaves $450,000, but I’m not done yet. Taxes is anywhere from 30-40%, which leaves you with a discretionary income of about $50-150,000. This is a huge difference from the one million dollars you started with, but let’s dig even deeper. The tithe to the church is 10%. You haven’t even brought yourself some transportation or a place to stay. On top of all this, your family and friends are looking for their piece of the pie.

What a lot of artists don’t realize is that in the music industry or the entertainment industry in general, earning money is far less straightforward than in other industries. This simply means that if an artist has a multi-platinum album or a hot single, it could take months or even years before the artist see his/her share of the money. Now that you have an understanding of how the numbers work in music industry, you can thank rapper/producer David Banner for sharing the knowledge that I am now sharing with you.