The dreaded ROYALTY question....

[Executioner213]

Ok, how do some of you guys do things in regard to this?

Do you map out all Levels of Effort, and calculate percentages of where money should go from there?

Do you get a bunch of cd's made, hand out even quantities to the band members and say "you earn what you sell"?

What do you do?

 

[egan.]

Are you just talking about on the DIY level?
An even split will always result in the least conflict.
The problem with trying to quantify contributions is that everyone is viewing it from their own eyes. It can also be really short sighted if you have a couple of writers making all of the money.

 

[Executioner213]

Yeah, for the sake of this conversation, it'd be the DIY level.

 

[Executioner213]

The idea behind giving everyone even amounts to sell is that it's, in all fairness, up to them to decide what they are going to make and they can't point fingers at anyone else for selling more cds (making more money) when they didn't put in effort to do so themselves.

This isn't a scenario I'm set on, just an example...

 

[Executioner213]

Hypothetically: Lets say a member of the band did the majority (lets say ~65%) of the writing, but that was the extent of his effort. The wild card (probably a giveaway, since we are on a recording forum) is that another person wrote the other ~35% AND is producing the disc. The one producing isn't so much worried about how much more he is going to get based on his efforts as far as recording the disc, but is worried the "65%"er is wanting to weigh more money out for himself...not because he saw himself doing more for it, but because of a majority-rules sense of entitlement.

This isn't exactly the scenario, but it's a way it could be seen going.

I guess I'm just looking for insight on how folks on here, who have already got thier feet wet, have taken care of such things as so there is little room for complaint/animosity later on.

 

[Nebulous]

I've heard from afew decent and larger local bands (one of which I tried out for and got a rundown of their financial split) is that when they play shows and sell albums, they don't take any "for themselves". All funds are out in the open and put into a "band bank account". They then use the funds to travel interstate, international, pay fo rehearsal areas, albums, etc.
Obviously if you get to the point that all that has been done and payed for and the band want to take a cut as an income (senario being that enough is left over for that), then by that point you could probably say that it's fair enough for everyone to get a fair cut.

 

[nwright]

I've heard from afew decent and larger local bands (one of which I tried out for and got a rundown of their financial split) is that when they play shows and sell albums, they don't take any "for themselves". All funds are out in the open and put into a "band bank account". They then use the funds to travel interstate, international, pay fo rehearsal areas, albums, etc.
Obviously if you get to the point that all that has been done and payed for and the band want to take a cut as an income (senario being that enough is left over for that), then by that point you could probably say that it's fair enough for everyone to get a fair cut.

This is how we do it in my band. Basically, we are 100% DIY, and have never spent any money outside of the band to do anything other than make merch (although we design the merch ourselves). On our level, we have day jobs, but take this seriously. As such, the money we make as a band stays for "the band" and whatever we choose to use it for collectively. We don't personally take any money as income.

 

[Moonlight_Seeker]

Well real companies who sell stuff other then music have at least two departments, one is the creation of the thing and the other is the marketing department. I would calculate both differently even if the same person might come up in both. So I would divide the profits between the musicians and the salesperson. Musicians get their normal commission which depends on the implication of the creation process and blabla. Sales people are by commission of what they sell.

So example, there is one composer and also one lyricist and its the same person.
There are 5 people in the band including that creator.
So the marketing team is consisted of 5 person.

Musical part : creator gets I don't know half of everything. The rest is distributed equally between the 4 other members.

Marketing part : you make 2$ per CD you sold.

The CD is sold 10$. The cost is I don't know, 5$ per CD.

So 10$ for the CD - 2$ for the sales person - 5$ for the CD cost = 3$ <--- that's the 3$ left for the musicians.

Creator takes half of 3$ = 1,50$
4 musicians take 1,50$ = 1,50/4 = 0,375$ each ( ok my numbers suck )

So there you go. You sell 1000 CDs.

1000 X 10$ = 10'000$
Covering initial cost and/or building a band bank account = 5'000$ ( once the initial cost is covered all can change here imho, but I know a keyboard player who got hired by a big international band here and she had to pay for the expenses of her touring, and she could not so she is not going and I know this other band who got signed to a big nuclear company and they have stuff to pay for the touring, so keeping that part of the income high is wise I think )
Marketing team gets 1000 X 2$ = 2000$
Musicians gets 1000 X 3$ = 3000$ and within that 3000$, if we follow my example of bad numbers, Creator gets 1500$ and musicians 1500$ divided by 4 = 375$.

Something like that.

And as the Notorious BIG once said, more money means more problems. So this should all be understood by everyone before anything happens. If the band wants to split the profit evenly then go but from my humble experience the more incentives sales people have the more the sell.

 

[Nebulous]

more money means more problems. So this should all be understood by everyone before anything happens. If the band wants to split the profit evenly then go but from my humble experience the more incentives sales people have the more the sell.

I think this is the most important point to take in at "the DIY" level.
At that point, how much money is actually coming into the bands possession (that doesn't have to be used to pay for something, either a debt or a coming purchase) is probably not worth being distributed.
I know that if I had to choose $500 in my pocket today vs having to shell out $1,000 for travel/ recording, etc, I'd leave the $500 in the band account. Hell, if you play it right and have a quiet period of writing and no gigs, the money could even be transferd into a higher interest account.
I'm sure no musician would complain about an extra $200 incurred while doing something they love. It could mean the difference between an interstate gig in 6 months or having to bail on it because the guitarist and drummer don't have funds to take out of their personal life.

 

[Nebulous]

Also, not paying members means that if one leaves, they shouldn't expect to get any sort of cut.
If the band breaks up, then everyone takes an even share and move on.

 

[Suicide_As_Alibi]

All my bands bar one have worked the same: you cover costs, then the rest is band funds. Realistically at small band level (in the UK at least), covering costs is often a pipe dream.

"Covering costs" works as such:

- If we record first, and pay £100 (split 4 x £25), then made £50 at a gig, we'd each get £12.50 back to go towards the money we each spent recording. If one person paid, say, £30 and one paid £20 for the recording, they'd just sort out the £5 at some point when the cheapskate has some money - but if not, then their shares of the £50 would be adjusted accordingly.

- If we gig first and get £50, then spend £100 on recording, the £50 pays for half of it, and the rest is split equally (so £12.50 each). Again, if one person couldn't stump up £12.50, then one other person would probably cover the whole lot and then the cheapskate would pay them back when and as they could.

That works the same for recording, rehearsals, CD duplication, etc. If a band member sells a CD, the money goes into the pot.

The only band I was in were it didn't work like that was signed - so it was all worked out who would get what percentage depending on what they did, blah blah blah. I was supposed to get a big share because I wrote the lyrics, but I didn't agree with that as we all wrote our own parts. As it happens, we left the label without making a penny (we technically owed them, but mutually agreed to forget that), so it was a complete waste of time...

When it comes to splitting profits, personally I've never even thought about it. I'm in two bands at the moment. In one I just play bass (and I don't even own a bass ), so I'd expect less than say, the lead guitarist/song-writer and singer/lyricist in that regard, but then I recorded our CD. Also,our drummer does all the artwork, so it would get pretty complicated to work out contribution-based percentages.

But in the other band I write all the songs and lyrics, I'm the only guitarist and vocalist, I record the CDs, I play bass as well on the recordings, I design all the artwork, I run the website (which I also made) and our MySpace... the other two guys essentially work as session musicians, and yet it would never occur to me to do anything but split the money equally three ways.

Steve

 

[John_C]

CD sales should be an even split, irrelevant of who actually physically sold them. Get a band bank account, everyone pays the money into that. At the end of every 2 weeks/ 1 month, pay out even amounts to the members.

Percentage splits and the like are only going to cause problems, as the percentages will change all the time. If your music is so easily quantifiable that you could get them right then it's probably time to give up

 

[HeadCrusher]

I think you have to make a difference when it comes to actual royalties, cd sales and money you get playing gigs.
royalties are a compensation for the actual act of writing a song/lyrics. Every time you perform your songs live or they get played on the radio somebody has to pay Royalties for that. Only the writers should get their share from that imo.
I would use the money you get from playing gigs to pay for expenses. If it is more than that everybody in the band gets an equal share. Since everybody was there and performed that seems fair.
CD sales (on a DIY level) is tough... I'd say everybody get's the same percentage that he contributed to the recording (with money to pay for the studio, not as a musician playing his instrument).

That's really an important topic. In my band four people write songs which is everybody but the drummer. So he doesn't get royalties. But we haven't decided yet what we're gonna do when it comes to recording. Since the writers will get more money out of the recording apart from CD-sales (radio airplay, more gigs -> more royalties...) you could argue that they should also pay more (or all) of the recording...

 

[Executioner213]

The scenario I'm looking at is that I usually pay for everything. I've fronted the money for everything to happen every time. Whenever we've played shows, since I had the vehicle that brought the equipment, I usually kept the money for gas...we'd only ever make $100 at a gig anyway. I am pretty sure that when we cut a disc, I'm going to be the one who puts up the money to get it duplicated. The way I see it, whether it's me who comes up with the money to do that or if it's Barney Fife or whoever, that person gets paid to a 0 balance first before anyone gets any sort of profit...might seem one-sided if it's me who is getting all the profit at first, but it also seems fair that if I front the money, that I get paid up first; then it's equal share for everyone involved.

I'm also going to be the one recording the album. In theory, one probably usually records thier own band for free...but when it comes to factoring what would have been put up for studio time, seems only right that the one who records the album gets a bigger share. I'm not talking monumental, but lets be hypothetical in relation to my previous scenario:
One dude wrote 65% of the material, I wrote 35%. A third dude wrote ~99% of the lyrics. 4 of us playing on the album...I guess, since we have a new drummer, that he has re-written a bit of the drums since he joined. I'm recording the disc, playing all the bass parts as well as my guitar parts.

I'm thinking at this point, even though it will technically be a compromise on my behalf, I'm thinking it should probably be close to a 4-way split.
However, thats what I was thinking of it being. I'm just asking for insight here to see what everyone else is doing so I can get a better idea of if I'm doing something wrong or inefficient. For me, it doesn't really matter because all my money goes in the "Money Pit" (band fund) anyways, but the 65%-er is mostly wanting to keep the money. I guess it's his right, but you know....gets frustrating when I'm the only one paying for shit.