Okay, this is how the business works. I'm putting it into simple terms:

We'll take Biggie's album "Life After Death" for our example. It went 10x platinum.

(We'll Use Fictional Numbers Cuz We Don't Know The Exact Ones)

-Big was signed with a $250,000 advance. Uncle Sam takes $75,000 right off top. So he has $175,000.

-Big drops "Life After Death"(Lets say he dropped it in the present time to use our prices). It costs $2 million to produce.

Breakdown of $$$:

Production/Studio Time/Engineer----$500,000
Manufactering/Duplication------------$$250,000 for the 1st million
Marketing/Videos-----------------------$1 million
Travel/Food/Lodging/Promotion------$250,000

We spent our budget. Now let's look at what we made when we dropped.

-We have 1 million albums to sell. Our distributor sells them for us. We sell them to our distributor for $10 an album. Right now average retail price of a cd is $16.98.

-The album is spread out into the 5 regions, North,
South, MidWest, West, and East. 200,000 copies in each region..

-In 1 month, we go platinum. We made $10 million. 8.5 million is taken away and given to the companies we worked with. After 3xs platinum, everything is ours. Lets speed this up. We owe 15.5 million to the companies, exluding our parent label who we owe half of whatever we make.

Our Income $70 million
Our Debt $15.5 million
______________________
Our Income Now $55.5 million

Half to Arista $27.5 million
________________________
Our Income Now, $27.5 million.


Now comes ASCAP. If we have songs one the radio now like 3, then that's another $20 million a year off those song.

We do a tour, 25 shows at $50,000 a night. Thats 1.25 million for one person, say PD.

Our Current Income 48.75 million.

Time to split money. Biggie gets 2%. He has 9.7 million. The rest is Bad Boy's, or P.Diddy's. Thats 38.8 million. So you pay royalties over 20 years, which will be 1 million a year.


Now imagine P.Diddy doing this with 4 album. That just goes platinum. Thats how he keeps his money.

Sean John makes $300 million a year, his restaurants and studio bring in about $50 million, and endorsement deals bring in another $20 million a year.

So if the artsits ain't got no money now, then that's on them. They still get paid 1 million a year on royalties. So they are not broke.