For “Record Store Day” I paid $30AUS for the “Killers and Kings” single from Machine Head.
Online I can purchase the single for $15US from the Nuclear Blast store.
So I selected the three other covers that I didn’t have and added them to my cart. The total was now sitting at $45US. Then I registered my account and since I am in Australia I was charged $29US for postage and handling. The total of my purchase was now sitting at $74US. Once I paid it via PayPal, the final payment figure from me was $82.21 in Australian dollars.
That equates to about $27AUS for each single.
Now if the Independent Record Store was selling it for $30AUS, then that would mean that the actual independent record store would be making $3 per item.
Hell if that is the mark up for each limited edition item they were selling and let’s just say that one record store sold 200 items, that would mean that the pure profit for the record store would be $600 for that day.
So is the “Record Store Day” there to benefit/save the independent record store?
And to put a spanner in the math, the actual royalty paid back to the band is a percentage on the wholesale price. And the wholesale price is about 50% to 80% lower than the retail price.
Let’s use the Machine Head example.
If the wholesale price of each single would be between $3 to $7.50 and if the royalty rate is a generous 20%. That would mean for each single sold the band would get between 60c to $1.50 royalty cut, to split between 4 people, plus a manager and a legal team.
So what happens when there is an advance upfront payment.
The band takes the money upfront, forsaking (in a lot of cases) any claims on royalties and the risk resides with the label on recouping that advance payment with the single release, the album release and other types of releases.
Either way, Record Store Day is not there to save the record stores. It is there to replace the revenue lost by the record labels due to the declining CD sales. It has nothing to do with keeping the record store open or trying to save the mum and dad independent record store.
It is pure label greed.
Sort of like how the record labels are going after Pandora again. This time around they are suing the internet radio service for not paying to use sound recordings made prior to 1972. But hang on second neither does terrestrial radio.
So what we have is the following scenario;
– Record company lawyers are filing cases against Pandora in state courts. This will enrich them.
– It will do nothing to put money in the hands of the artists.
– What will happen is that Pandora will more or less stop playing these pre-1972 recordings instead of paying another license fee that federal law says you don’t have to pay.
– If the legal bills mount up for Pandora they will go out of business and the 60% royalty rates that Pandora paid will disappear from the record label and publishing companies bottom lines.
– It would do nothing to bring in more money.
– It still doesn’t solve the industry’s biggest problem which is to find a new business model that replaces the revenue lost from the decline of CD sales.
It is pure label greed. To use a phrase that they use in relation to piracy, “IT IS THEFT, PLAIN AND SIMPLE”.