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Author Topic: Dollars And Sense About CDs Part I  (Read 1469 times)

hargerst

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Dollars And Sense About CDs Part I
« on: June 05, 2004, 03:01:52 PM »

From June, 2002

So when should a band start thinking about cutting an album and selling it at gigs?  The first question you should be asking yourself is, "How many CDs can we realistically expect to sell?".  If the answer (including family members, friends, and fans) is under 100 CDs, it doesn't make sense to go for a full album, but a 3 to 5 song CD might be a good alternative. If the answer is around 200 to 500 CDs, then it makes good sense to start thinking about doing an album. Here are a few plans to consider:

New group, not many gigs, and under 100 potential CD Sales:
Doing a 3 to 5 song demo to send out to clubs for gigs, and selling to fans, friends, and family is a good idea and it can pay for itself very quickly, if you plan it right.  You'll burn your CD-Rs yourself, do your own labeling on the discs (using paper labels), and print all your booklets and traycards on your computer.  You don't have to make up 100s of CDs, only enough to cover a show (10 to 20 at a time), and your costs won't break the bank. Getting the actual recording done will be the bulk of the expense. Figure anywhere from $500 to $1,000 for studio time in a decent studio. If you can sell your 3 song demo for $5, and a 5 song demo for $10, it'll take you about 100 CDs to break even - everything you make after that first 100 CDs is straight profit.  Use any profit you make to pay for recording more songs, till you get to the 10 to 12 song range. If you can sell an additional 100 CDs, at that point you'll have enough for your first album.

Group's been together a year or so, several gigs a month, and around 300 potential CD Sales:
This is the perfect range for selling to fans, friends, and family, and it can make a nice profit quickly.  You'll still burn your CD-Rs yourself, do your own labeling on the discs (using paper labels), and print all your booklets and traycards on your computer.  You don't have to make up 100s of CDs, only enough to cover a show (20 to 30 at a time), and your costs won't break the bank. Figure anywhere from $2,000 to $3,000 for studio time in a decent studio. Considering that you can sell your CD for $15, it'll only take you about 200 CDs to break even - everything you make after that first 200 CDs is straight profit. You can probably make enough in CD sales to not only pay for the first album, but cover the cost of a second album as well.

Group's been together several years, several gigs a month, 500 to 1,000 potential CD Sales:
If you don't have a CD or two by now, you should fire your manager.  !,000 CDs can bring in an an additional $10,000 in group income, and pay for all the CD costs as well.  This is where you leave the "do-it-yourself" league and move in with the big boys. Imprinted CDs, shrinkwrap packaging, the works. This is the package that can take you to the national level, if you play your cards right.  We're gonna get into some details next month about what should be on your CD if you wanna succeed in the music business. We'll also cover how to prepare for doing CDs at each of the levels we've just talked about, with actual cost breakdowns, business plans, and preparation guides.

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Harvey "Is that the right note?" Gerst
Indian Trail Recording Studio

Joe Crawford

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Re: Dollars And Sense About CDs
« Reply #1 on: June 05, 2004, 05:59:15 PM »

Harvey,

You are ‘right-on’ with this, and the two associated threads.  I’d even go a bit farther and say that with the current proliferation of small and medium studios, any band that plays a gig a month (or more) can now have a CD to sell, and, at the least, break even on it.  If they can’t sell a couple of hundred (at maybe 5 or 10 per gig) to family, friends, and the occasional groupie, they probably shouldn’t be gig’n.

One cost you left out, and one of the biggest expenses locally, after studio time, is usually the cost of mechanical rights for the cover songs (now at $52.50 a piece from SongFile.com).  Most of the newer bands don’t have enough of their own songs yet to fill out a CD.  Besides, including a few ‘known winners’ on the CD makes them a lot easier to sell.

There are only a couple of places where I might differ (slightly) with you.  First is in the manufacturing of the CD-R’s.  You can now get 100 CD’s, professionally burned, printed, packaged, and shrink-wrapped for under $250.  By the time you price in the cost of good quality blank CD-R’s, stick-on labels, and ink cartridges for the printer (a ridiculous $35 each), you really can’t burn and package them yourself for that price.  The only thing you save is probably up-front costs of paying for 100 at a time.

Second, at least around here, there seems to be a limit to what people will spend for an ‘Indi’ CD, and that turns out to be around $10.  At $10, tourists will buy one if they just like the color of the packaging, or usually, just to sample a taste of the ‘local’ music.  Half the time, they don’t even need to here the group play.

As the costs keep dropping, I think more and more music will be produced and sold locally, and independent of the big record companies.  It’s the only way for local bands/groups to become published.  And, it’s already become a major factor in both the folk and bluegrass venues.

Joe Crawford
Stony Mountain Studio
Shanks, WV  
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