Hollyisco - Tech, Data, and Bankrolls

In May of 2000, Hole lead singer Courtney Love spoke to an online entertainment conference held in New York City. In that speech, Love explained how a hypothetical red-hot four-person band with a major-label recording contract—that gets a $1,000,000 advance to record an album, plus a 20% royalty off the album sales—can, in those days before digital downloads mattered, still wind up earning nothing, at best, if that album sells a million copies. Of course, that’s because, in addition to production costs and taxes, there’s also the matter of recoupable expenses imposed by the record label for promoting that album, which by Love’s own math, means the label turns a sizable profit.

Courtney Love – Hole

Love was quoted as saying back then that “the system is set up so almost nobody gets paid.” But have entities that have sprung up since 2000, like iTunes, YouTub, and SoundExchange, resulted in artists standing more of a chance at getting paid from major labels? I wouldn’t know, as I’m not a recording artist, but considering what a writer at a prestigious publication came up with—it’s time do the math again.

Glenn Peoples, a Nashville-based writer for the music chart magazine Billboard, recently wrote a story based on Internet rumors of a deal that actress-turned-singer Gwyneth Paltrow signed with Warner Music Group’s Atlantic label for $900,000. With the help of an anonymous Nashville-based recording executive, Peoples figured that the $900,000 would be divided between the cost of making the album [$300,000], and an advance that Paltrow would get [$600,000], which would be subject to those recoupable expenses.

Add to it the promotional and marketing budgets for that album, including everything from producing music videos to radio promotion, photo shoots, advertising, and TV appearances, and it ends up costing more than triple the rumored $900,000, or $2.9 Million. If that album sold at least 465,000 copies, and if singles from that album were sold 930,000 times [such as via iTunes], then the album would perhaps be considered a “break-even” proposition, assuming Paltrow doesn’t sign away her rights in the name of a “360 deal” or goes out on tour, which Paltrow’s acting career might keep her from doing. Never mind that acting in movies didn’t stop Juliette Lewis from finding time to be a rock star.

Chris Martin (Coldplay) – Gwyneth Paltrow

To which I would add, since Atlantic would, it seems, own the master recording, and, one would assume, that Paltrow doesn’t write or co-write any of the songs she could record on her album, then she would get not a penny from those. But with Paltrow’s already a well-established name from her acting roles, and with her having sung in a couple of movies—“Duets,” from 2000, in which she and Huey Lewis, playing daughter and father, respectively, in a karaoke bar, remade the 1979 Smokey Robinson hit “Cruisin'”; and the 2010 movie “Country Strong,” in which she played a washed-out country star who tries her luck at a comeback—not to mention being married to lead singer Chris Martin of Coldplay, I think she can afford to not get a penny, while having fun in a “life imitating art” kind of way.

Watch the Gwyneth Paltrow ‘Country Song’ Video

Gwyneth Paltrow – Country Song

Even so, at least if you’re signed to a major label, what Courtney Love said about a system that is “set up so almost nobody gets paid” somehow still holds true today. Maybe not to the same extent as before with the advent of digital, but enough to say that nothing’s changed? Perhaps, yes. And it could also very well explain why it’s more to the artist’s advantage to be fully independent. This means not just writing and publishing your own songs, but also owning your master recordings, as well as social networking and grassroots touring.

Do you think Gwyneth is just having fun as a country singer? Or might she be getting a bum steer of a deal?