Companies Make Money

Record companies make money by selling recordings. It is a high-risk business. According to the Recording Industry Association of America (RIAA), approximately 90% of the records that are released by major recording labels fail to make a profit. Independent labels have to be more careful in their choices and in their allocation of expenses because they do not have the resources to cover many failures. However, they can make and promote records for far lower costs than major labels and be profitable with far fewer sales. The budgets for making and selling recordings are tied to what labels estimate they will sell. Knowing how many recordings might be sold makes it possible to budget recording costs. Most profitable labels have histories of selling and promoting that enable them to estimate gross income. Recording Costs Recording costs are borne by artists, not record companies. Record companies commonly make loans to artists (all-in advances) for these costs and recoup them from royalties. With the exception of jazz and classical artists, new major label artists can spend between $100,000 and $500,000 to make a record, but recording budgets of one million dollars and more are not uncommon. Many independent artists will spend less than $15,000. Manufacturing Costs Manufacturing includes replicating recorded material and packaging. The costs depend on the number to be manufactured. Manufacturing costs are generally borne by recording labels, although labels try to deduct packaging costs from the base price on which they pay royalties. Major labels pay approximately $.50 to $.55 per CD. Independent labels that order more than 100,000 CDs a year pay approximately $.65 per CD. Labels that buy less than 10,000 CDs a year pay approximately $1.20 per CD. These costs include the printing of 4-page package inserts and tray cards. Royalty Costs Record labels pay two royalties: The first is a record royalty to the performing artist(s); the second is a mechanical royalty to composers and publishers. Some companies pay record royalties on a percentage (8% to 16%) of the suggested list retail price (SLRP) less a packaging cost, generally 15% to 25% of the SLRP. Others base royalties on the wholesale price to distributors. For a CD with an SLRP of $16.98, a common packaging deduction of 25% is $4.25 and the amount paid to the artist will be calculated as a percentage of $12.73. Thus, at a 10% royalty, artists will receive $1.27; at a 14% royalty rate, $1.78. Record labels pay composers and publishers mechanical royalties. They try to cap mechanical royalty budgets at ten songs payable at 75% of the statutory rate ($.80 per song in 2002), which equals $.60 per song under the controlled composition clauses of recording contracts. Promotional Costs Major labels budget approximately 20% of annual gross income for promotion and selectively allocate the funds according to sales projections for each artist. Independent labels generally budget 10% of projected gross sales of all recordings annually and selectively allocate that budget. Promotional costs include designing and printing promotional and packaging materials for recordings; press kits and Web sites; and advertising, radio promotion, videos, public relations and mailing costs. Some or all the costs for packaging, video production and radio promotion may be recouped from artists’ royalties, depending on contractual agreements. Distribution Costs The record companies decide on the suggested list retail price (SLRP) of each format. The SLRP helps stores to determine the discount price they charge customers and helps performers determine the price to charge to fans at gigs and by mail order. The price at which distributors buy from recording companies (distributor wholesale price) is also set by the record companies. This is commonly 50% to 55% off the SLRP. If the volume is high enough, the discount can go to 60%. The price at which stores buy from record distributors (store wholesale price) is determined by the distributors. This is commonly 55% to 65% of the SLRP. Stores return unsold product at 100% of their cost. The price at which record stores buy from record companies that own their own distribution warehouses is approximately 75% of the SLRP. Potential Profits How do these costs relate to a million selling album? At common discounts, record companies receive approximately $10.00 per CD ($16.95 SLRP). Thus, projected record company gross income is ten million dollars. Out of this the record company will spend approximately $625.000 in manufacturing costs; approximately $1,000,000 in promotion (another $1,000,000 will be charged against artist royalties); $1,780,00 in royalties to the artists (at 14% of the SLRP of $16.95, less packaging); and $600,000 in publishing royalties (at 75% of statutory). After subtracting $4,005,000 from its ten million gross income, the record company has a gross profit of $5,995,000. It will recoup its million- dollar advance to the artist and its promotional costs.

Big Bubble

World Record Setting Big Bubble

Extreme Bubbles Inc. set the first World Record in the category of “Largest Free Floating Soap Bubble” on October 9th 2005.

Our record setting bubble was 105.4 cubic feet. If the big bubble was filled with water, it would weigh 3.2 tons!

We created the bubble using our proprietary solution, beeboo Big Bubble Mix, used with a custom made two-handled big bubble wand similar in style to the Dip Stix wand

 

• In 1960 inventor Arthur Fulton was granted the first patent on a flexible loop bubble toy. His toy had a ribbon like loop attached to a long rod. This allowed the loop to be compressed and inserted into a small container of bubble solution, then expanded to open the loop and create a large bubble.
• In 1987 inventor David Stein was granted a patent on his toy, The Bubble Thing™. It also used a ribbon like loop attached to a long rod but with an improved mechanism to open and close the bubble loop. It also added a weight at the center bottom of the loop. With this device David started a worldwide fascination with giant bubbles and created the outdoor bubble sport.
• In 1988 David Stein went on to get the first World Record for the Largest Bubble Tube, 50 foot long.
• In 1986 inventor Kalvin Klundt designed the first giant bubble maker with two long handles, named Dip Stix™. He was later granted two US patents on his design. It used two long rods to support and control the flexible bubble loop and a unique round cord with a double coil. The loop absorbs and releases the large amount of bubble solution needed to create huge bubbles.
• In 1997 Alan MaKay set a new World Record in 1997, for the Longest Bubble Tube using the two handled design. His Bubble Tube measured an incredible 113 feet.
• In 2005 Extreme Bubbles Inc. created a new World Record category, Largest Free Floating Bubble, and set the record with a bubble measuring 105.4 cubic feet.

Largest Burlesque Club

WHO:


Club Noir (UK)

WHAT:

1,630

WHERE:

Glasgow, UK

WHEN:

14 February 2009



The greatest attendance to a burlesque club event was 1,630 and was achieved by Club Noir (UK) at the Glasgow Carling Academy, Glasgow, UK, on 14 February 2009

Largest Disco Ball

WHO:

Raf Frateur

WHAT:

diameter of 7.35 m (24 ft 1.3 in)

WHERE:

Antwerp, Belgium

WHEN:

July, 20th 2007

The largest mirrored disco ball measures 7.35 m (24 ft 1.3 in) in diameter and was made by Raf Frateur of Frateur Events. The ball was displayed during a party at the club "Studio 54" in Antwerp, Belgium, on July, 20th 2007.

Largest Gold Coin

WHO:

Royal Canadian Mint

WHAT:

weighs 100 kg (220 lb 7oz),

diameter 50 cm (19.6 in),

thickness 3 cm (1.1 in)

WHERE:

Ottawa, Ontario, Canada

WHEN:

3 May 2007

The largest gold coin weighs 100 kg (220 lb 7 oz), measures 50 cm (19.6 in) in diameter, 3 cm (1.1 in) in thickness and is made from bullion with a purity of 99.999 per cent. The legal-tender coin was introduced on 3 May 2007 by the Royal Canadian Mint with a face value of CAN$1 million (US$900,375; £451,585).

Largest Cardboard Box

WHO:

Aarhus Business College

WHAT:

11.53 m x 4.61 m x 2.31 m (37 ft 10 in x 15 ft 1.5 in x 7 ft 7 in)

WHERE:

Aarhus, Denmark

WHEN:

30 October 2007

The largest cardboard box measured 11.53 m x 4.61 m x 2.31 m (37 ft 10 in x 15 ft 1.5 in x 7 ft 7 in), it was designed and manufactured by students of Aarhus Business College in Aarhus, Denmark, on 30 October 2007.

Largest Kimono

WHO:

National Kimono Festival

WHAT:

11.72 m wide, 12.80 m high

(35.4 ft wide, 41.9 ft high)

WHERE:

Cho Kagoshima City, Japan.

WHEN:

March 23, 2001.

On March 23, 2001 the largest kimono in the world was created as part of the National Kimono Festival in Cho Kagoshima City, Japan. The giant kimono was 11.72 m (35.4 ft)wide, 12.80 m (41.9 ft) high and weighed 100 kg (220.4 lbs).