Costs and margins of a CD

[EKE BBB]

I´ve just read an article in a Spanish newspaper about costs and margins in making a CD.

They included a resuming table that I have tried to translate:

Retailer´s margin 25%

VAT 16%

Royalties 13% (they divide it into "Royalties de los artistas" and "Derechos de autor")

Recording costs 6%

Manufacturing costs 4%

Distribution costs 12%

Promotion & marketing 10%

Producer´s margin 14%

Some points/opinions/questions I´d like to make:

-VAT is not correctly calculated, as they put 16 out of 100 (16%). Well, the Spanish VAT for music is 16%, so if we calculate 16% for 100, total would be 16 out of 116 (13,8%)

-What´s the difference between "Royalties" and "Derechos de autor"? (sorry for my ignorance)

-As it´s focused on "modern music" (sic) I guess this table is applicable for new releases and not for reissues, that I think would be totally different.

-This must be an average, cause to my knowledge top-sellers & independent musicians / big companies & small companies... can´t earn the same

-This is the Spanish market, totally different from US market

I´d like to know the opinions, critics, etc... from our knowledgeable "industry" members. Specially when applying this criteria to JAZZ releases.

Thanks in advance and sorry if this has been discussed elsewhere (I didn´t find any related thread).

[Claude]

  EKE BBB said:

-What´s the difference between "Royalties" and "Derechos de autor"?

Royalties go directly to the musicians. Copyrights go to the composers (if different from the musicians).

Normally, something has to be paid to copyright collecting societies too (GEMA in Germany, SACEM in France), even if the musicians are also the composers.

[Phil Meloy]

  EKE BBB said:

-What´s the difference between "Royalties" and "Derechos de autor"? (sorry for my ignorance)

Hi EKE BBB - I'm afraid I don't speak Spanish but I would imagine they are refering to royalties paid to the composer(s)/publisher(s) of the music on the CD i.e. the publishing royalties as opposed to royalties paid to the musicians who actually perform on the album.

Edited May 4, 2004 by Phil Meloy

[EKE BBB]

Thanks for the clarification, Claude and Phil!