Who pays a record label for artist sales?

Record Sales and Royalties

For the sale of physical records (i.e. CDs, tapes, mini-discs, etc...) labels are paid through a distributor who is responsible for the manufacture and distribution of the physical product. These distributors sell the records to retailers such as Tower Records or f.y.e who in turn sell them to consumers. Major labels handle their own distribution. The artists are entitled to a negotiated royalty payment from the sale of each record.

For sales through download services such as eMusic, Rhapsody, or iTunes the record labels have individual agreements that allow for a certain percentage of the sales of their music to be paid by the online retailer.

For public performance royalties, that is royalties paid for song performances on the internet, TV, clubs, restaurants, or concert venues for example, performance rights organizations (PROs) such as SoundExchange, ASCAP, BMI, and SESAC are responsible for the collection and distribution of royalty payments to member artists. Virtually every artist is a member of most if not all of these organizations.

First answer by Marques Johnson. Last edit by Marques Johnson. Contributor trust: 100 [recommend contributor]. Question popularity: 62 [recommend question]

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