How The Music Industry Works

Posted on April 18, 2004 by Sara Hickman. | 2 Comments

I feel compelled to write about this today.

I have people ask me over and over how it works, how much money I make,
how many cds I sell, how does distribution work, and so on…I”ve talked about this industry before as a panelist and in my newsletter, but I decided I’d take a moment and jot it all down so anyone who is curious, perhaps a musician or even parents of a musician!, can just visit my blog and say…”Oh…wow…”

I will start with what I am doing as a small business person now, and then I’ll describe indie/major labels for those of you who are curious. This is, at least, my understanding of how it goes.


As an independent artist, I pay for everything. There is no backer or bank I visit to get financial support, although for the album “Faithful Heart”, I took out my first bank loan, ever, to pay for a cd. For example, I projected that cd would cost $25,000 to create, and I came in just under that amount.

To create a cd, generally one needs to consider these costs:

Studio costs
Engineering costs
Musicians Fees
Duplication costs
Artwork/design for cd booklet, posters and any other art related materials
Producer fee (will there be points involved, as well? Points are explained later on.)
Licensing fees (if any music NOT created by the artist will be utilized on the recording)
Independent Radio Promoter

This has changed rapidly in the industry due to home recording studios and digital recording. Artists can save TONS of money by doing a homemade recording, whether out on the street, in their home, or in their garage. However, I still go the old fashioned route, as I have no home recording studio and rely heavily on my dear friend and long time engineer, Marty. We have worked together for 14 years, so our ability to work quickly, effeciently and with a great deal of fun is a relationship I’d hate to lose. I feel blessed that I’ve witnessed so much change in recording technology—from actually splicing 2 inch tape for edits in 1989, to having it done in a nano-second on Pro-Tools in a computer since 1990 (?) or so.

With that said, however, a studio cost depends on location and the studio itself.
For example, a studio in NYC is going to cost a lot more than a studio in Austin.
A typical studio will have a “lock-out” rate, whether you want to have the studio
for your project for an 8 hour block, a full day, or weeks upon end. That rate generally includes an engineer in the price, although some studios add that as an extra cost. Will you be having an assistant engineer, as well? That can come in as a cost, although most studios have interns, so you won’t be having to pay for them—they come with the studio.

What does a studio cost? A sample rate would be the studios here in Austin—a lockout rate can be about $650 a day, with engineer.

Most engineers are anywhere between $35-100 hour, depending on the engineer. (I’m sure if you’re working with the big guns, it would be a lot, lot more.) My experience with engineers is that they work harder than ANYONE ELSE on the project. They have to deal with the producers, the musicians, the artist, the labels, and everyone breathing down their neck, asking for changes, usually last minute changes. Great engineers are willing to offer advice because they have a lot of knowlege in sounds/sonic quality, mixing, and are usually eager to be involved as a creative element. However, they also tend to be wise in keeping this advice to themselves unless you ask. Engineers, to me, are as important as the producer, if not more so: the engineer is what makes a record
sonically sound high caliber/quality or average, and you are going to spend 100% of your time in the studio with them. They are there day in and day out til the project is completed (in the studio). So, be nice to engineers!

After recording all the songs and vocals (if any), an album will be “mixed”. “Mixing” is the final act of turning the songs into finished pieces. Sometimes mixing takes place at the same studio the songs were laid down, or recorded. This makes things easy, as the engineer already knows the instrumentation and effects utilized. However, I have, occassionally, taken my recordings to a different studio to mix. Why?

Well, it can be more cost effective to stay at the same studio, especially if you have prepped well and follow your production schedule to the tee. However, a fresh set of ears can also be beneficial, not only for the artist, but the producer and the engineer, who at the first studio, might be burnt out on the songs. It all depends on who you are working with, availability (a studio may only have so much time, so you are forced to continue working at another venue), and what you, or the producer, are trying to achieve artistically. Different studios have different vibes, different layouts, different cutting and mixing rooms, different technology (boards (if you are recording on tape), monitors, effects, microphones, etc) and these can all effect your recording.

For example, Arlyn studio has a myriad of rooms,
like a castle, so I could choose to cut a vocal in a large, empty room for a natural reverb (or bring in seperating walls to damp the sound), or I might choose to record in a tight little booth. Cedar Creek has a warmer, smaller room. So does Congress House or Flashpoint. I recorded “Faithful Heart” at Arlyn with songs cut “live”, meaning the band performed at once, and then I mixed the recording at Congress House because I was comfortable with Mark Hallman, having worked with him over all these years on numerous projects.
I knew he would bring an intimacy to all the hard work Marty and I had
created at Arlyn.

Again, this depends, generally, on what part of the country (or world!) you are in. Musicians ask from $50 to $350, sometimes per hour, sometimes per song. If you are using a musician for every cut on a recording, you can also ask them if they have a day rate so you can block them out for the day or week or month or whatever and save yourself some money. If your state is union, you will have to find out what the going rate is…for example, in California, which is unionized, I’ve had musicians tell me they are “double” or “triple” rate per song. So, if the going rate is, say, $150 a song and a drummer says to me “triple”, I will be paying him $450 a song. (You can see why money dries up quickly in the studio and you have to be on top of your costs and time!)

The cool part of this industry is when people offer to trade out. I’ve gone in and sung on other people’s recordings because they did the same for me (or played mandolin, etc.)

After mixing, and before taking a recording in to be duplicated and sold to, hopefully, everyone you know and beyond!, there is mastering. Mastering is
the final tweaking of the mixed songs. It is also the time when the order of the songs is finalized, tiny mistakes are erased (a squeak on a guitar, a strange rattle hidden deep in the mix, an errant breath, etc), more “oomph” is brought to the lows, and mid-ranges and trebles are all dealt with, as well. Mastering is a lot of fun, and only takes around 7 or 8 hours, depending on the project. It is generally $75 an hour.

I”LL WRITE MORE….I have to go make DINNER for my family!

As a producer myself, I save a lot of money right off the bat. Producers can cost anywhere from $50 an hour to a flat fee of thousands and thousands of dollars, depending on their time, committment and whether or not “points” are involved. Points are when a label commits to a producer that the producer will receive future financial payments from the sales of the cd (or “product”, as it is referred to in the industry.)

2 responses to “How The Music Industry Works”

  1. Randi says:

    As I type this, Im listening to “song for my father” on my mp3 player and Im just curious. Why must you be on an indie label? You are certainly extremely talented. Dont you believe that your music would be popular with the mainstream population?

  2. JR says:

    Sara, Apple’s iTunes music store has your song Simply in their “Wedding Essentials” collection…so someone there likes you…the song is from a Mountain Stage compilation…you should be working on getting more of your stuff up there…they are expanding their indie presence…I’d sure be happy to download you from there…

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