Who gets what when you buy a CD?

Some interesting figures buried in Rolling Stone’s article about Wal-Mart’s quest for $10 CDs:

This breakdown of the cost of a typical major-label release by the independent
 market-research firm Almighty Institute of Music Retail shows where the money
 goes for a new album with a list price of $15.99.

 $0.17 Musicians’ unions
 $0.80 Packaging/manufacturing
 $0.82 Publishing royalties
 $0.80 Retail profit
 $0.90 Distribution
 $1.60 Artists’ royalties
 $1.70 Label profit
 $2.40 Marketing/promotion
 $2.91 Label overhead
 $3.89 Retail overhead

Putting that into UK money at the current exchange rate (£1 = $1.80), that works out as:

Retail price of CD: £8.88

£0.10 musicians’ unions
£0.44 packaging
£0.44 publishing royalties
£0.44 retail profit
£0.50 distributor
£0.89 artists’ royalties
£0.94 label profit
£1.33 marketing and promotion
£1.62 label overhead
£2.16 retail overhead

Of course, things are different in the UK - VAT is higher than US states’ sales tax, although while UK firms charge VAT they can claim back the VAT on their spending - and the average retail price of a CD is currently £10.50, not £8.88. I suspect retailers’ profit margins are higher, too.

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