music industry - great divide chart

*Fame, fortune and lots of money may be what folks think and dream of when picturing a career in the music industry, but a bit of patience should be added for anyone focused on being the next Kanye or Rihanna. cites  research from Nielsen, which reveals that only 2.1 percent of the albums released in 2009 sold even 5,000 copies. That translates to just 2,050 records out of nearly 100,000.

Even if you’re an artist that’s able to move units, the research shows that said artist is the last to get money from all the hard work he or she puts in singing or rapping their heart out ion the studio. That privilege would first go to paying the crazy amounts charged by producers and management as well as legal fees, record advances and, “if they can afford it, health care.”

For a specific breakdown on who gets what from money generated from record sales, scroll below for the following payees:

SLRP: The suggested list retail price of a CD is currently $16.98, while the standard wholesale price — what retail stores pay the label per CD — is about $10. Once the retailer gets the CD, they can sell it for however much they’d like — hence “suggested.” Artist’s royalties are a percentage of the retail price. Superstars can get 20 percent of the SLRP, but most get 12 percent to 14 percent.

Packaging charge: 25 percent of the SLRP goes back to the record company immediately for what’s called a “packaging charge” — that’s the label literally charging the artist for the plastic case in which his or her CD is sold.

Songwriter/publisher: If an artist doesn’t write his or her own music, someone else has to. And someone who writes a song must first go through a music publisher, whose job it is to place that song with a recording artist who will agree to perform it. If an artist buys the song, the writer and publisher then receive 9.1 cents for every copy of the song sold, a sum they must then split.

Personal manager: This manager guides the career of the artist and gets about 15 percent of the artist’s gross earnings.

Record advance: Unlike touring fees, of which the record company can only recoup half, record advances are 100 percent recoupable. That means that if the label fronts an artist $75,000 to pay for whatever he or she needs to record an album–studio time, new instruments, etc. — the artist then owes the label that initial $75,000, regardless of whether the record is a success or not.

For more information on where record sale money goes, click over to TheRoot.