Now I see why Kreay doesn’t care about albums sales on iTunes
The Record Label’s Slice of the Pie
Record companies get a cut of absolutely everything a musician produces.
That’s not too surprising, considering artists are a risky investment the record company is taking a chance on. They pay advances to the artists for recording costs and other expenses, but they expect a return on that investment.
So just how much of a cut does the artist get for an album sale under a record label?
Every contract is different, but the average high-end royalty deal with a record company will pay musicians $1 for every $10 retail album sale.
And it can be a lot worse than that; a low-end royalty deal only pays 30 cents per album sale — amazingly small for a CD purchase, especially considering that bands may have to divide that among several members.
In the popular digital realm, a $9.99 download on a program like iTunes nets artists a modest 94 cents — less than a 10% cut. The record company takes $5.35 and Apple keeps the remaining $3.70.