The Cost of Recording (and breaking even)

Managing your band like a business is essential to the financial success of your band. What makes it difficult is that there are many ways to sell your music. Paying attention to the costs of recording/mixing/mastering and distribution methods will directly effect whether or not your business is making a profit.

(Warning: contains math)

There are many recording studios in Wichita:

This blog post will explore cost efficacy and how to spend money responsibly according to the goals of the band business.

Let’s start with some basic generalities. (Although they are not always true)

  • It is easier to convince a customer to spend $5 instead of  $10. Therefore, it will be easier to sell a 5 song ep for $5 over a 10 song Lp for $10.
  • Buying in bulk helps lower the price per unit, which makes it easier to mark-up at a lower price. You will see in the examples below…

Different pricing for recording:

I’ve recorded many times at a few different studios. Based on how they’ve charged me in the past, here are my conclusions for each type of rate.

1a. 5 songs at $50 per hour

  • Track 2 songs in 8 hours if well rehearsed and lucky.
  • 1 song = 4 hours
  • 5 songs = 20 hours
  • Est. 1 hour mixing + mastering per song = 5 hours = +$250

25 hours x $50 = $1,250 total

  • According to cd baby, estimated $250 for distribution of 100 copies of cd’s
  • DIY artwork is free. >_>
  • $1,500 divided by 100 copies = $15 each.

Spending $15 on each cd is not good. That means you can sell all 100 copies for $15 each to break even. or…you can sell sell 50 copies for $30 each to break even. After you sell all 100 copies, you double your money and make $1,500. Clearly this is NOT reasonable, you will never break even this way. The goal is to sell at $5 per cd of 5 songs. What about 200 copies?

  • $1,250 (recording/mixing/mastering) + $480 (distribution) = $1730.
    $1730 / 200 copies = 8.65 per cd
  • $1250 recording + $650 distribution = $1,900 total
    $1,900 / 300 copies = $6.33 per cd
  • $1,250 recording +$800 distribution = $2,050 total
    $2,050 / 500 copies = $4.10 per cd

If you go this route and get 500 copies, you spend $4 per cd. you can mark-up this price to $8 per cd.
At $8 per cd, you would need to sell 256/500 copies to break even.
At $5 per cd, you will need to sell 410/500 copies to break even.

1b. 10 songs at $50 per hour

  • Track 2 songs in 8 hours if well rehearsed and lucky.
  • 1 song = 4 hours
  • 10 songs = 40 hours
  • Est. 1 hour mixing + mastering per song = 10 hours

    50 hours x $50 per hour = $2,500 total

  • $2,500 + $250 distribution of 100 copies
    $2,750 / 100 copies = $27.5 per cd
  • $2,500 + $480 distribution = $2,980
    $2,980 / 200 copies = $14.90 per cd
  • $2,500 + $650 distribution = $3,150
    $3,150 / 300 copies = $10.50 per cd
  • $2,500 + $800 distribution = $3,300
    $3,300 / 500 copies = $6.6 per cd

Sell cd for $13 each.
At $13 per cd, you would need to sell 254/500 to break even. the rest is profit.
At $10 per cd, you would need to sell 330/500 to break even. the rest is profit.

These figures are watered down. It is much more likely that you will spend 8 hours tracking 1 song, and several more hours on mixing/mastering. The example here places 1 song = 5 hours which is $250 per song, but hourly costs are probably going be more like 11 hours = 1 song. (8 hours tracking + 3 hours mixing/mastering). That is $550 per song. That is more than double the cost. The point I want bands and Audio engineers alike to take from this is:

Unless you are going to sell 1,000+ copies of your album, it is not worth the cost to record at a place that charges you this way.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

2a. Flat rate $250 per song for 5 songs (mixing + mastering included)

  • $250 per song x 5 songs = $1,250
  • $1,250 + $800 distribution = $2,050
  • $2,050 / 500 copies = $4.10 per cd

If you noticed, that is the same rate as above with $50 an hour. Only this time it is not dependent upon finishing in 4 hours and only having 1 hour for mixing + mastering. It is a flat rate and payment is due when the song is done. This ensures that the song gets the attention it deserves without rushing everything and doesn’t break the bank to get the kind of quality you want.

At $8 per cd, you would need to sell 256/500 copies to break even.
At $5 per cd, you will need to sell 410/500 copies to break even

This is still not cost effective, but it is significantly better than $50 per hour.

2b. Flat rate $250 per song for 10 songs (mixing + mastering included)

  • $250 per song x 10 songs = $2,500
  • $2,500 + $800 distribution = $3,300
  • $3,300 / 500 copies = $6.6 per cd

At $13 per cd, you would need to sell 254/500 to break even. the rest is profit.
At $10 per cd, you would need to sell 330/500 to break even. the rest is profit.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

The biggest problem for local bands is that they will find it very difficult to sell enough  cd’s to break even in Wichita. There simply isn’t enough members in the music scene available, let alone interested. The music scene in Wichita is mostly made up of musicians who are already in bands; and most of them are more focused on their own band rather than helping the music scene grow. Quite frankly, there isn’t enough support. The only realistic way to “break even” is selling outside of Wichita. Even then, there is going to be a lot of time and effort involved.

Of course there are online tools to help increase sales. iTunes, Bandcamp, Amazon, Google Play, Spotify etc. But they also charge a distribution fee.

Let me offer some alternative ways. Think of it as a challenge to the many local recording studios in Wichita.

  • The recording studio needs to set up purchasing on their website and make it user friendly. The studio can charge a distribution fee and take a percentage of the sales for the convenience. This would also help promote other artists who have recorded with the studio. Setting the website up as a shopping site will keep the Studio well funded as well. Imagine bands on tour, handing out a business card to everybody at their shows saying, “buy our album here!” Why would they bother going to iTunes, Bandcamp, Google Play, when they can just go to the Studios website. All out of shirts? Check out our studios website. You can order one in your size there! Free band sticker on an order over $50!
  • Studios are businesses. But so are Bands. There are lots of other ways you can pay for services [insert porn music here]. The studio can act like a bank and give out a loan to a band. Only the studio loans out recording/mixing/mastering. But in return the studio keeps all revenue from record sales for a period of time (ex. 6 months to 1 year). If the band does not make enough money to break even, (very likely) the band can pay back the difference. (making sure they pay the difference is important. Otherwise they would just give it away.) Bands are more likely to record, which means the studio is more likely to sell. Even if the band does not “break even”, the studios quality is still demonstrated, and the studio still makes money from whatever sales the band did make.
  • Studios can also have a membership fee. (like joining a gym) While the band pays  a monthly fee, the studio is insured a steady flow of income, while the band enjoys keeping its own profits. This will motivate the band to work harder, and the studio will benefit from it at a steady rate.
  • Record/mix/master/distribute an album for free for a band but taking all revenue from sales or even door money. You could book bands you recorded together, then take 100% of the door money + 100% of sales. That could be a killer night. Easily make over $1,000 that night. The studio isn’t out anything, except time.

You are looking at the local music market all wrong. I understand that it is much safer for recording studios to see the band as a customer and charge them for your services. That vehicle will work just fine. However, I encourage recording studios to see bands as potential business partners. If recording studios invest in bands, the bands will invest in the studio. Both the studio and the band will greatly benefit and thrive as a team. Eliminate the mandatory need for bands to escape Wichita to maintain success, and let recording studios reach the point where they can actually quit their day job to focus on recording bands.

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