Even though most people here know the majority of the
record-producing
cycle, I'll review just to make sure that we're all on the same page:
Step 1: Artist X Produces a
Demo.
Step 2: Executive Y at
Record Company Z listens to the demo.
Step 3: Artist X is signed with
Record Company Z.
Step 4: Record Company Z gives
Artist X a sum of money and
studio time/
equipment to
produce and record music. Record Companies often have their own
engineers to record and edit music, also.
Step 5: Record Company Z has the
record/
CD/
album/
single,
etc.
pressed.
Step 6: Record Company Z either
distributes the
music (
shipping to stores) or pays someone else to do so.
Step 7: Record Company Z takes all
income from the sale of merchandise and pays its employees, the distribution company, the
recording studio, the pressing mill and everyone else, except the artist.
Step 8: Record Company Z counts the number of
units sold and pays the artist a fixed rate per
album. This number is usually in the
pennies.
Step 9: If successful, Record Company Z
pressures Artist X to create another
album. The cycle starts again from Step 2.
This
dynamic is
analogous to only one other
business model I know at this time;
The Pimp - Ho Relationship:
The Record Company is the Pimp
The Artist is the Ho
The Stage/Studio is the Corner
The Audience is the Trick