Most music fans have no idea how the music business is structured. Reznor says that the record companies and current distribution system rips off music fans, but the record companies get a substantially smaller percentage of retail CD sales than Reznor's share of live gate receipts. When performing acts become successful enough to tour nationally and perform at venues like arenas and outdoor amphitheaters they get over 90% of the gate receipts. This is true for just about any headlining band at a major venue and certainly includes NIN. With some performers venues will bid on the show, giving points to the artist. Barbra Streisand, for example, has sometimes demanded 100% of the gate receipts plus percentages of concessions, and venues will accede to those demands for the prestige of hosting a megastar.
The big venues make money from parking, concessions (where they sell you $0.25 worth of CokePepsi for $4) and usually 33% of merchandise sales. The artists aren't willing to make less money so t-shirts at concerts are typically more expensive than from the band's web site.
The promoters do get a cut of the gate, of course, less than 10%, but with current ticket prices, a show can easily gross $1,000,000, and $50K-$100K isn't bad for one concert. Megapromoters like SFX/Clear Channel can make big bucks with all the shows they are simultaneously promoting.
But it's the talent that makes the real money at Reznor's level in the music biz. Factoring in merchandise sales, he's probably grossing close to million dollars a night. While it's true that it costs money to put on a show, it should be pointed out that record companies haves costs as well.
The record company receives at most 50% of the retail price of the CD and has to pay production, promotion and royalty costs out of their share. Reznor gets over 90% of the ticket price at concerts, so he really has no moral standing to criticize record companies and record stores (regardless of how loathsome I consider the big 5 record companies to be). At least with the CD you are buying a tangible item that might actually retain some monetary value (or become a valuable collectible, even). A concert ticket buys you an experience, of unquantifiable value, and I doubt that Reznor's ever refunded tickets for putting on a bad show, so it's unclear whether Reznor is giving you a better overall deal than the record company.
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Most music fans have no idea how the music business is structured. Reznor says that the record companies and current distribution system rips off music fans, but the record companies get a substantially smaller percentage of retail CD sales than Reznor's share of live gate receipts. When performing acts become successful enough to tour nationally and perform at venues like arenas and outdoor amphitheaters they get over 90% of the gate receipts. This is true for just about any headlining band at a major venue and certainly includes NIN. With some performers venues will bid on the show, giving points to the artist. Barbra Streisand, for example, has sometimes demanded 100% of the gate receipts plus percentages of concessions, and venues will accede to those demands for the prestige of hosting a megastar. The big venues make money from parking, concessions (where they sell you $0.25 worth of CokePepsi for $4) and usually 33% of merchandise sales. The artists aren't willing to make less money so t-shirts at concerts are typically more expensive than from the band's web site. The promoters do get a cut of the gate, of course, less than 10%, but with current ticket prices, a show can easily gross $1,000,000, and $50K-$100K isn't bad for one concert. Megapromoters like SFX/Clear Channel can make big bucks with all the shows they are simultaneously promoting. But it's the talent that makes the real money at Reznor's level in the music biz. Factoring in merchandise sales, he's probably grossing close to million dollars a night. While it's true that it costs money to put on a show, it should be pointed out that record companies haves costs as well. The record company receives at most 50% of the retail price of the CD and has to pay production, promotion and royalty costs out of their share. Reznor gets over 90% of the ticket price at concerts, so he really has no moral standing to criticize record companies and record stores (regardless of how loathsome I consider the big 5 record companies to be). At least with the CD you are buying a tangible item that might actually retain some monetary value (or become a valuable collectible, even). A concert ticket buys you an experience, of unquantifiable value, and I doubt that Reznor's ever refunded tickets for putting on a bad show, so it's unclear whether Reznor is giving you a better overall deal than the record company.