In general, most artists are short of money at the beginning of their career. They have had to forego full time jobs in order to perfect their craft. The advance can be the only major source of income that a recording artist can expect for some time. Bank Loan
Recording artists tend to use advances as a form of bank loan which helps get their business started. Lets look at a typical example of a band with 3 members, taking a £100,000 advance for the first album:
£100,000 sounds like a lot of money, but it can disappear quickly.
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This is a rough guide only! |
What is left? |
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Initial advance |
£100,000 |
| After management commission, any previous expenses and VAT (if the management company is VAT registered)
|
£70,000 |
|
After 3 band members salary for 1 year @£10,000 per year |
£40,000 |
|
After equipment and insurance costs of £10,000 |
£30,000 |
|
After expenses for band (gigs, traveling, clothes etc) of £10,000 |
£20,000 |
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After legal bills for initial and subsequent negotiations of £5,000 |
£15,000 |
|
REMAINDER (to be used as a contingency for emergencies) |
£15,000 |
Typical advances are usually paid in two or three instalments:
1. On signing the deal
2. Starting or completing the master recordings
3. Delivery of the masters to the record company (or acceptance and release of the recordings).
(This might take the form of £50,000 on signing, £25,000 on commencement of recording and £25,000 on release).
You may have to live for some time on this advance, it could be well over a year. If your records are released and they sell, you will not get paid until your advances and other expenses are paid back. You will probably have to exist on the next set of advances for the second album option (if the record company give you this).
If you are a songwriter as well as a band member, the news is slightly better, as you will be able to gain additional income from a publishing deal or directly from MCPS and PRS (if your music is being broadcast or your records are selling).
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