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How Much Does it Cost to Produce a Recording?
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."
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
It is human nature to take shortcuts in thinking.
My band 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.
Steve Albini wrote a classic article, The Problem with Music, 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).
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.
philcrissman.com.
The real costs of any effort of that type are going to be people costs. So it costs $600 for a recording for a chuch band, maybe $1000 if you had to hire more of the equipment.
On the other hand a top act such as U2 or the like are likely to want to spend several days in a fancy studio with a full crew of sound technicians, personal assistants, caterers and the like. It is pretty easy to end up spending $10K a day that way - even if you own the actual studio and all the equipment.
After that there is the cost of making music videos and the payolla required to get airplay. Those costs have gone up quite a lot since Queen spent $500 to make the Bohemian Rhasphody video.
Clearly the industry can't spend $500K+ on the low budget albums that form the bulk of new releases. But even so few of those low budget efforts are going to have a chance to get anywhere near the top 40.
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on the artist, the label, the studio, etc. Even among people I know personally, the figure has varied widely. The most my own band ever paid in studio costs to record anything was when we paid $140 to record a six-song EP. I know one band who had a pretty decent regional following and were together for ten years. They released several recordings, but a lot of them were done really cheaply because they knew people who would cut them breaks.
Two hardcore/metal bands I knew a couple of years ago from the same town each put an album out around the same time. One spent a couple of weekends at a small local studio and put together a full-length CD for about $1200. The other, who had hired a manager and thought they were going to go big time, took a month off, put themselves up in an apartment in a town 30 miles away and recorded an album in a "big" studio for $30,000. They never did get the big break. The two guys who wrote most of the material left the band because they refused to quit their jobs to do the joke of a "tour" the band set up after the CD came out.
The band i farm, with whom my former band used to play shows, went from making self-released records at the same $20/hour studio we recorded at and being recorded by their friends in recording school to recently doing an album for a small indie label for $6000 at the Blasting Room (run by Stephen Egerton and Bill Stevenson from All/the Descendants).
The point is, it's a really difficult question to answer. Really big bands spend a lot of time in really big, expensive studios working on albums. It's incredibly easy to run the cost of a recording up to the $200,000 mark or past when you're speding six months in a $2000/day studio in another country (thereby incurring housing costs as well). Or working in multiple studios. And bringing in guests to play. And hiring three different engineers to mix, etc.
As for markup. When I was working in a CD store (1994), we, as an independent store, paid the one-stops an average of between 8.99 and 10.99 for discs which had a usual retail of about $15.99-$16.99 at the local chain store (it was a big deal at the time that the new Tom Petty greatest hits album cost us $12.49 and was going for $17.99 in the chain stores).
Of course, as an independent, we had to undercut the chains by selling the discs for $13.99-14.99. And, of course, as an independent, we also had less buying power and had to buy discs through a middle man. The chains who were charging more for the same discs got them far cheaper directly from the labels by the truckload.
One more thing to consider as far as major labels are concerned is that their idea of artist development is to throw a bunch of money at a whole group of performers and hope that one or two of them make it big. They charge the associated costs to make the album back to the artists and give them all a big advance. A couple make it and actually pull in enough money to cover those costs and make some money. The rest never see any money past their advance because they aren't paid royalties until the album breaks even. Some make several albums that never break even and just go deeper into debt with each album.
The best thing that happens to some indie bands that jump to majors and don't get big is to get dumped from the label because by the time that happens they're usually so far in debt they'll never get out. If they've still managed to keep a good portion of their fanbase, they can go back to making cheaper albums for a small label again (see: The Mighty Mighty Bosstones).
The interesting thing about the music industry is that albums are like films. If you keep the budget down, you don't have to get a lot of business to make money. Chasing Amy was Kevin Smith's most successful film not because it brought in the highest box office take. Chasing Amy, Dogma and Jay and Silent Bob Strike Back all made about $30 million at the box office, but Chasing Amy was the only one that cost less than a million to produce. Similarly, Elektra stays with a band like Phish, who refuse to promote themselves to a wider audience and don't sell a lot of albums because they sell a steady amount of albums and they don't spend a lot of money making those albums.
You seem to think the band makes its money from CDs. Let's hear from a career musician.
From personal experience: in 37 years as a recording artist, I've created 25+ albums for major labels, and I've never once received a royalty check that didn't show I owed them money. So I make the bulk of my living from live touring, playing for 80-1500 people a night, doing my own show.
-Janis Ian
About 1/3 of those items are to the direct benefit of the artists. The guitars, the sound equipment, the blow-out party, the catering, the tour bus and the limos are all effectively income for the artists.
This trickery generally benefits the artists because they're not taxed on the benefits it provides them with, unlike the 7/11 clerk, who has to pay income and Social InSecurity taxes on every dime of his income.
I'll bet the 7/11 clerk would change places with them in a heartbeat.
I read a very interesting biography of Richard Branson, who founded the Virgin record label among other enterprises. He was taught a hard lesson in economics from the other side of the fence. He signed some number of bands. One was a huge hit, the rest did poorly. Overall, he made very little even though his business was glamourous and he had a lot of fun with it.
In other words, just because the gross is pretty doesn't mean the net isn't ugly.
In this case, consider that the semi-hit analyzed here has to support a number of flops, that don't come even close to recouping their costs. Overall, then, the label probably does a lot worse than you think, precisely because this guy selected a middle of the road example.
Anyone know what the actual profits of the record labels look like?
D
Yes, you absolutely can get a set up for $20,000, but you get what you pay for. There are some things you can skimp on, but some things just simply cost big money and cutting corners directly impacts the sounds quality. For example, you simply can't buy a decent sounding studio vocal microphone for less than $1000, and you should be spending more like $3000 to get something that sounds nice - you can spend more if you want. A decent analog compressor will set you back over $1000, and while digital compression has its place (I'm definitely no luddite when it comes to audio technology) there are still times when an analog compressor is best for a number of reasons.
There is monitors and amps. The sky is the limit here, but I wouldn't mix a commercial album on anything costing less than $5000 (yes, I do use near fields most of the time, but still need the big speakers for reference).
Then you get to room treatment... oh boy. This one is HUGE. If you want a great sounding drum kit, you need in rough order:
- A great drummer
- A great sounding drum kit
- A great sounding room
- A bunch of nice mics (5 - 10 mics at $1000+ each)
- A bunch of good quality inputs for those mics
- Then something to mix it with, record it on, etc - that's almost a detail
A great sounding drum room with decent sound proofing can easily cost tens of thousands without going over the top. Let's not even mention the acoustics in the control room. On top of all that you need a skilled, experienced engineer who understands how all the above interact - the human, the acoustics and the electronics are all part of a complex synergistic relationship that feed off each other (yeah, it sounds like hippy crap, but it's true - work a few years in a studio and you'll know what I mean).This is just getting started, I could go on. So for those who think all you need is a beefy PC/Mac, a copy of Cubase and a nice sound card, then you need to get out of hobby land and work on some real records. BTW, I'm certainly not saying that you don't use those things, I'm generally a fan of computer based recording, but they are just a small part of a big picture.
One caveat: for electronica, anything goes. There are no rules and no real concept of low end as far as budget goes. I'm mostly talking about music with live musicians, which there will always be a demand for.
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...ago, I worked for a contemporary country artist (Michelle Wright, "Take it like a man" was *the* U.S. hit) as the front-of-house tech.
She had a few cds out at the time, and I remember hearing from her (or her manager) that the cost to make an album *for the label* is around one dollar apiece.
Frad
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The real cost isn't equipment, its labor. Equipment is essentially a 1 time investment. I'm producing my album with about 30k of equipment and it will sound as good as a pro studio, however a real studio will have $100k - nearly infinite dollar ammount of equipment... but since I know how to use the equipment LABOR IS FREE. Also alot of the cost of equipment is the building. Real studios have special buildings with modified heating and cooling systems, special wiring ducts, and the rooms are dressed in sonics to reduce sound reflections.
I have no doubt that albums like britney spears cost 1mil to produce. Assuming the studio has all the equipment you need... You need to hire session musicians (drums, bass, keyboard, backup vocalists, string players, guitar). Then you need support staff like vocal coaches, multiple engineers, multiple songwriters, etc etc. All of these people make 25 - 100$ hour, plus the 50 - 500$ you are paying per hour just to be in the studio (the companies may own their own studios, I dont know. They may also have session musicians on salary, thats the way I would do it).
Now a band that comes to a studio with its songs written and well rehearsed, doesn't need anything but a few engineers and THAT can be done on the cheap. Real professionals can do an album for nothing. I've seen all star jazz bands walk into a studio, lay down each song in one take, and be done before lunch. Couple days mixing and the thing is done. But those are guys who've been playing for 35 years.
Religion is a gateway psychosis. -- Dave Foley
Studio time, plus the musicians pay was pretty much a days work for the 10 or so people involved.
Then there is the cost of pressing the records (which is probably higher than making CDs).
Anyway, check out the book Making of Kind of Blue.
Today you can probably record and print 1000 CDs for under $5000.
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In late 1996, a label rep from WEA (Warner's distribution arm) told me that it cost the label an average of $3.20 per cd to get it to market. Thing is, that's for a major artist, and that cost includes promotion, big-name producer, etc. Your mileage will vary significantly.
My advice is to get a good hard-disc 16-track (about $800) and do everything up to the mastering process yourself. Take the product to a local engineer and have him master it (usually about $200, often far less). With the finished product in hand, all you have to do is cut a deal with a distributor. From there, you have the choice as to how it's marketed, promoted, and most importantly, priced. Even if you can sell it at $10.00, you'll be far cheaper than major-label stuff, and yes, price is a selling point.
One last thing. If you do it yourself, it's yours. It can't be shelved three weeks before release, used without your consent in a Gap commercial or held for ransom because you threaten to break a restrictive and humiliating contract. Paul Simon still has to pay to play "Sounds of Silence" in his concerts.
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The problem is that not every record sells a million copies. Not every artist tours large arenas and stadiums. Many international artists sell perhaps 50000 copies per album, and tour at small clubs. If they can afford to tour at all.
Let's say we have a five-piece rock band just trying to get their stuff heard. After spending months of their free time writing and rehearsing material they decide to record a four-song demo. One full day in a studio with an engineer. Then mastering, and optimistic 1000 copies of the disc, including cases and artwork, to sell in the Internet. Total cost approximately $2000. If they sell all the copies for $6 they get $6000. Reduce expenses, and they have $800 for one person. That's not much for months of hard work put into their material.
Let's take another example. CMX, a popular Finnish band who have basically no markets outside of Finland, because all their material is in Finnish. Three years ago they did a 120-minute double-album, which has sold over 20000 copies (that's successful, gold certification in Finland is 15000). They had two studios for four months to record it. Total cost, including cost of people involved, was probably somewhere near $200000. That's about $10 per album sold. Add distribution and marketing. Had it been a single-disc album it would've been a disaster, but as a double-disc it could be sold for a slightly higher price of about $22-$25.
This is one of the most expensive albums ever produced in Finland. It wouldn't have been made if they weren't a well-established and popular band. Getting songs even recorded and released if your potential audience is small (like in smaller countiers, or with somewhat marginal music) isn't easy.
Most less-known artists have dayjobs, because they would have to sell tens of thousands of CDs every year to make enough money to live. A lot of my over 600-CD record collection is from artists, who sell perhaps 20000 copies of their albums worldwide. They simply can't afford $200000 to do a record, nor have they time to write and record a new album every year because of their jobs.
Then again, should records really cost only as much as the production, marketing and distributing them really costs? Sure, you could get the latest Britney Spears or Limp Bizkit disc for $5 and they would still be profitable for the record company, but stuff by CMX or Shadow Gallery or [insert your favourite underground artist] would still be at least $15 just to break even.
I have a band, Metric Nut metricnut.com, and we have a cd about to come out on February 25th on Times Ten Records. The cds total cost to record for us was about $10k. This is a pro peice of work. The studio that we use is a moderately high end place that charges in the 500 a day range and since we aren't selling a million records we only pressed a couple thousand at about 90 cents each. We have gotten a little college play around the US, and some good reviews, so you can figure that the recording is decent enough, although look at the white stripes...that is a garage recording.
Anyway, for refernce, Nirvana's big hit record cost about 50k in the end to record, they probably paid somewhere in the 10-20 cent range for each unit, but they spent 100 million on promotion. its pretty easy to see why they charge 15 dollars each.
In the end it realy depends on your level in the pyramid, and your budget. I have heard awesome records that i know cost half of what our did, so It can be done relativly easily, you just have to have your head on the right way on the right day.
The / in
So, add that cost (the studio time) to the cost paying the producer, to the cost of paying the band plus any studio musicians you need to providing catering and a top notch band could easily cost the record lable a bundle.
An unknown band probably costs at least an order of magnitude less than $500k to $1.5 million, but then, they don't get the top notch stuff. Sometimes, they'll come up with something phenomenal with midrange equipment. Sometimes they won't. But the ones who come up with the really good stuff are going to want the high end equipment next time around
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Remember you are paying for MORE THAN THE DISC when you buy a CD. I must admit that CD's are grosley overpriced. YES, the record companies are making a killing and YES, the artists are (for the most part) getting screwed. However, looking over the threads, I've seen some people are a bit unclear about the process of creating a CD and the costs involved.
As mentioned in an earlier post, the compact disc media has become very very cheap over the last 15 years, yet CD prices continue to rise. Here are some of the other costs involved in producing a CD:
MECHANICAL LICENSE FEE: When you buy a CD, part of the cost covers a mechanichal license fee. Believe it or not there is a fee of 7.55 cents PER TRACK for any CD pressed.
RECORDING/ENGINEER FEES: It is not a simple process to create a CD. There are 3 steps, recording (at least $2,500 per track assuming you don't need to many overdubs), mixing (at least $2,000 per track) and mastering (at least $500 per track). Now these costs are relative to the caliber of studio you record and mix at. For a big-time artist at a platinum-quality studio, you can easily quadrouple these numbers.
RECORD COMPANY FEES: Most people get upset and claim these guys are driving the cost way up. Well, for the most part, that is true. But it is important to realize that these people are the ones responsible for promoting an album. The artist does NOTHING to help move their albums (well, I suppose you can count touring). The producers and record execs do all the work to push your album.
PRODUCTION: It boils down to $2.25-3.00 per disc for 1,000 - 10,000 copies. This includes a glass master, the disc itself with 4-color face printing, 10 page 4-color insert, jewl case, barcoding and all those annoying stickers on the case edge. For large quantities, the cost is certainly hess. Probably about 40% less for more than 500,000 copies.
I certainly hope you find this information useful.
-DJ Blair