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Author Topic: Economics of Arhoolie 1970s...or Chris tells it like it was  (Read 1270 times)

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Offline Bunker Hill

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Economics of Arhoolie 1970s...or Chris tells it like it was
« on: January 21, 2008, 12:08:08 PM »
I wonder what the economics are today? Apologies for the way the table has come out, perhaps one of our "table" experts can rectify.  From Arhoolie Occasional 1971, p.1

What's Involved In Making Arhoolie LP?s

Since many people think that records are very profitable, let me try and present to you some of the facts especially as they pertain to a small independent label like Arhoolie with a lot of long playing but slow selling records in their catalog!

When you decide to record someone the first expense is the advance to the artist. This fee is usually an advance against royalties of about 20-30c per LP sold. Such advances will vary from a few hundred dollars to thousands depending upon how many musicians and the popularity of the artist. When dealing with Pop records such advances reach astronomical figures! Then comes your studio time?but here you can go out to the singer's house and record him with your own tape machine thus saving those fees. But tape does cost money and you always use a good deal of it. If you are recording in a studio and a band is involved you will need the 4 track or even eight track tape which is much more expensive. Once you have your original tapes you have to go to a studio and "master" the album. If it was recorded on your own tape machine you can equalize the sound and even make a nice stereo master tape from it. - When you dub down from 4 or 8 track tape all this takes more time which means money! Now you have your "master tape". Again you needed more tape! From the master tape you get an acetate master disc cut. From this master disc the pressing plant will make metal parts (mother, master, and stamper), one of which, the stamper, is put on the press to make the actual LP pressings. So much for the disc!

Your jackets and the work that goes into them is a very big expense and the printing business is geared to mass production and small quantities are relahvely costly. Here is a summary of the costs involved:
A) Fixed costs
      low
                 high
artist's fee
$200
$2000 + up!
studio for recording
00
500 * up!
tape for recording
30
130 + up!
mastering + dubdown
60
300 + up!
tape for mastering
20
30
master acetate disc
60
80
metal parts
50
60
cover art
100
200
type
50
100
negatives
30
100
Total
$600
$3500

B) Costs per 1000 discs       
labels
$20
printing of covers
50
printing backs
10
assemble jackets
70
1000 LP discs
350
Total
$500

So the first 1000 LPs will cost you at least $1100.00 or $1.10 each or on the high side $4.00 each. (+ up!!) Since the average LP selling at a list price of $5.98 in record shops brings only about $2.25 from the distributor you can see that things don't look very bright if your record sells only 1000 copies! The important thing is to keep the costs down when you make records of limited appeal! Color covers are prohibitive and I only use duo-tones which mean two colors. Often when I have a really fine photo the cheapest and most effective is a black and white cover.

However after a record sells over 2000 copies things become more rewarding. On the low side 2000 LPs cost you $1600 or 80c each and on the high side they cost $4500 or $2.25 each thus just breaking even since that is what you got for them if you sold them via regular distributors. In addition to these expenses you must include the artist royalty which was included in the first 1000 discs by his advance but which adds about 25c to the cost of each record beyond that figure. If you used songs owned by other publishers you will have to add another 24c for the use of 12 songs on each LP! The reason many record companies can afford to dump their records at 98c or such, is the fact that once you run off large quantities the cost per unit drops way down and usually no royalties are paid on such "close-out" LPs!

Unfortunately Arhoolie LPs are not pop records and we can not sell thousands of copies of an LP right off - far from it. In 1969, Arhoolie best year so far, the best seller in our catalog sold a little over 1700 copies, and our slowest seller sold 69 copies! The average came to about 400 copies sold of each item in our catalog.
« Last Edit: January 21, 2008, 02:06:12 PM by Rivers »

Offline Rivers

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Re: Economics of Arhoolie 1970s...or Chris tells it like it was
« Reply #1 on: January 21, 2008, 01:46:15 PM »
OK am fixing the table now while nobody else is in. Done.
« Last Edit: January 21, 2008, 02:06:51 PM by Rivers »

 


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