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Labels, not musicians make money from record sales

While this might be something a lot of people have known about for a long time, it's not what you'd hear trumpeted by most big music labels. The claims often made by these corporations is that without album sales, musicians starve – it's why they go after pirates so much. However now some interesting new research has shown up, which makes it quite clear who makes money from album and single sales: the labels, not the artists.

Care to take a guess as to how much of an average musician's income comes from actually selling their work? Six per cent. That's it. This comes in behind 10 per cent from session work and 28 per cent from live performing. The information comes from research by Professor Peter DiCola of the Northwestern University School of Law, who quizzed over 5,000 musicians and artists about where they make their money.

Now you might be thinking that of course the lower income musicians aren't going to make much from record sales. They don't have the fans to generate the big bucks and they might not even have album deals or the promotion to get the word out. Well that theory is shot down in flames by further evidence from DiCola, who also graphed the results by income. Ultimately it showed that the richest artists, the top one per cent, made almost the least of the lot, easily beaten out by the lowest earning group.

Music Earnings
DiCola's statistics paint a bleak picture of the music business. Source: Money from music study

DiCola also asked artists about file sharing, with the results split quite evenly. A quarter of those polled believed it harmed them, while another quarter said it helped them – the rest were indifferent.

Collating all this data together, DiCola suggested that current copyright laws benefit the highest earners the most and specifically music labels, since by protecting music sales, the labels protect their own revenue streams more than the artist's.

That said, he was keen to point out that copyright law was still important, as it helped protect those that relied on composing work for the majority of their income: “Those who focus their activity on composing rely on composition revenue and are much more vulnerable to harm from copyright infringement. The same goes for recording artists who rely on sales of sound recordings,” DiCola writes.

KitGuru Says: It really seems criminal that music labels suck up so much of an artist's revenue. Obviously these big musicians aren't starving and they don't have to worry so much about the business side of things, but there's got to be a better way of doing this. [torrentfreak]

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