At 1 cent per song, I'm hosed. Rather than continue listen to people here pull numbers out of their asses, howswabout we do some math?
Let's assume I'm shooting for the U.S. median income, around $50K/year.
Let's assume I can only produce 1 album per year (think you can do better? Try it some time, smartass.)
So I need to gross $50K/album. But wait, I'm not alone, I have bandmates. And they all want to make the median income as well. So really, we have to make $250K/album. This is your most basic labor cost.
But I probably won't be able to put out the best album possible in my basement. Hyperbolic claims for the abilities of computer software packages aside, a Neumann mic is expensive. More expensive than I can afford. So I go to a studio. Not an expensive one, a fairly cheap one that charges $50/hour and throws in the engineer for free.
Let's assume I don't hire a producer.
I can say from experience of several albums that it takes several weeks minimum to record a decent album (in the more complex musical styles...granted a singer/guitarist/folkie can record an album in a couple days if they're prepped), and in most cases several months. For this argument lets say I take 3 months. That's 40 hours per week at $50/hour, or $24,000.
Now I need to have it mastered. That's at least $500.
Production: Discmakers will do 1000 copies for $1290. Order more and you get a discount. Let's assume I get my unit cost down to $1 by ordering at least 5000 copies.
My hard production costs now look like this (note that the physical CD is an almost trival part of the cost) -
The band - $250K annual/3 months worth = $62.5K Studio time - $24K Mastering - $500 CD production - $5000
Total: $92K
Let's assume I do no marketing, and am able to sell all the CDs at gigs.
To break even, make no profit, and pay for just those 3 months work, I have to charge $18.40 per disc if I make 5000. If I try to make the CD pay for the entire year's salary for the entire band (thus generate $279.5K total) I'd have to charge $55/disc.
That's not gonna work, so I make 10K CDs and sell them all. Now I'm down to $28/disc. Assuming I can get the venues to pay me $1000/night and we gig 150 days per year, I can charge $12.90 per disc (if I make 10000). (Btw, $1000/night is wildly optimistic, as is 150 gigs per year at that rate. Try it sometime if you don't believe me.)
If we make some assumptions about amortizing the cost of the disc over some period of time we can probably get the sale price down to sub $10/disc.
This is with zero marketing. Zero label support. Just driving all over the place gigging and selling CDs. And if we actually sold 10K CDs per year we'd be way ahead of most folks...that's a lot of CDs for any non-national major label support band, and probably won't happen.
Add in marketing costs and the price goes back up. Way up.
"Just sell it online, all your costs go away!" Um, no. $10K of my costs go away. The other $269K are still very much there, thanks. Online sales takes $1 off the price. The physical disc isn't the expensive bit.
This all assumes I'm a "successful" musician who can get lots of gigs and sell lots of CDs. If I'm less successful, I'm basically making poverty wages.
Going the other way, let's take you dipshits that want to pay me $0.01 per song/$0.10 per album. Let's see, to break even I only have to sell, um...2.6 million albums? ARE YOU FUCKING KIDDING ME? I'm all for high standards, but don't you think that's a bit unreasonable? To do that I pretty much have to start a boy band. I'm pretty sure world jazz ain't gonna get me there. And that, my sorry little asshat, is just to make $50K/year gross. No bling, no Ferrari, hell, probably no fucking health care and if I'm lucky maybe a mortgage.
So to you folks that think musicians are making too much money off all this, and that you should stick it to the Man by not paying for music: pull your head out of your ass and do a little math. There's a reason that guy who served you coffee isn't playing music full time. He makes more money at minimum wage serving coffee.
Term, holidays, term, holidays, till we leave school, and then work, work, work till we die. -- C.S. Lewis