Why Your Favorite Musicians Are Broke

The day has come to make a video about the music record industry. In a billion dollar industry, somehow the talent walks away with very little. In this video, I share with you how money flows in the music industry, why your favorite musicians are broke, and why you'll constantly hear musicians complaining about their record deal or record label.

The central point of this video is the 360 deal, aka the 360 contract. This contract allows for the record label to dip their hands in everything an artist does. The record labels typically fool young and naive artists to sign a 360 deal when they have no leverage and are in need of the money.

They gladly accept the record advance because they've never seen money like that before. But it isn't long before they realize that the advance is recoupable, meaning the label will receive the money back through future royalty payments.

This is how artists can sell millions of albums and still go bankrupt. When they receive a huge advance, most artists want to go spend the money. But the label counts the advance as money that should be going towards production of the album. When the album is finally released, the label will get their cut first. Then from the artists' cut, the advance will be paid back.

In some scenarios, the artist isn't able to sell enough to pay back the recoupable expenses. This leaves the artist in debt to the label. The label will take the first profit from touring, merchandise sales, etc in order to recoup their money.

A vicious cycle can be created. Sometimes artists will even be shelved because the label no longer believes in them and doesn't want to invest the money into promoting the artist. The artist is now stuck with a signed record deal and they can't put out music.

Sources Used for Research:
-- https://www.digitalmusicnews.com/2013/07/02/threesixty/
-- https://www.digitalmusicnews.com/2018/12/25/streaming-music-services-pay-2019/
-- https://soundcharts.com/blog/how-the-music-publishing-works
-- https://www.nme.com/news/music/30-seconds-to-mars-7-1241945
-- https://www.ifpi.org/how-record-labels-invest.php
-- http://hiphopandpolitics.com/2010/02/05/warning-hip-hop-artist-need-to-know-about-todays-360-record-deals/
-- https://www.recordingconnection.com/reference-library/recording-entrepreneurs/how-do-record-labels-turn-a-profit
-- https://link.springer.com/chapter/10.1007/978-3-030-02481-9_3
-- https://journals.sagepub.com/doi/pdf/10.1177/1367549412457478
-- https://www.youtube.com/watch?v=CKrdsGdLVQ8
-- https://www.rollingstone.com/pro/news/the-median-u-s-musician-is-still-making-under-25000-a-year-666833/

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