Ayu & Avex

[orbitalaspect]

Originally Posted by Delirium-Zer0

Any company in their right mind is going to do what they can to get as much money as possible. That money goes to the artists, the people running the company, studio time, graphic designers, lawyers, accountants, rent on office space, TONS of unseen people making the business work. Whatever you have to do as a company to make sure everyone gets paid, do it.

I'd MUCH rather they release best-of after best-of than force artists to do shows all day every day and record 2-3 albums a year, that's for sure. The more money they can make without Ayu doing any actual work, the better for everyone involved.

Labels don't have much control over their artists' touring schedule. In all actuality, the artist makes a very tiny fraction of the money generated from an album sale.

Say Ayumi Hamasaki sells 100,000 copies of a new album at $34.00 USD each. That's a total profit of 3.4 million USD. Now, we have to break down where that money goes:

$3,400,000 (Total Market Revenue for 100,000 in sales of an album)
- $510,000 (Subtract Retail Markup of 20% per album)
-----------
$2,890,000 (Actualized Revenue Record Label Earns)
- $578,000 (Subtract Ayumi's Royalties Per Album - 20% of Label's Revenues)
+ $250,000 (Add Back Ayumi's Advance from Label)
-----------
- $328,000 (Ayumi's Actualized Royalties After Advances)
-----------
$2,312,000 (AVEX's Actual Revenues)

$328,000 (Ayumi's Income from 100,000 Sales of a New Album)
- $65,600 (Subtract Manager's 20% Cut)
- $49,200 (Subtract Agent's 15% Cut)
---------
$213,200 (Ayumi's Actualized Income from 100,000 in Sales.)


At the end of the day, Ayumi makes extremely little from the recording and sale of a new album. However, in order to maintain her contract, she has to be generating profit for Avex, and this is partially why album releases from her and Koda are more common than from artists like Namie right now.

My calculations are extremely lenient though.

Now, compare this to touring where the label is only granted a limited gift of tickets and measly 10% of touring profits:

$3,460,000 (20,000 People Attend Concerts at an average price of $173)
- $500,000 (Subtract Touring Costs)
- $250,000 (Subtract All Musicians' and Dancers' Salaries)
- $346,000 (Subtract Label's ~10% Royalties)
-----------
$2,364,000 (Ayumi's Income from the tour)
- $472,800 (Subtract Touring Agent's 20% Cut)
-----------
$1,891,200 (Ayumi's Actualized Income from 20,000 people attending a tour.)

Generally, artists release material through a label to promote tours, not really the other way around. If people like the songs, they end up selling more tickets and this is how the artists will make their money.

BTW, I may be WAAAY off on some of these figures, but it's just meant to show how much of a difference there is to Ayumi's pocket from an album release and a tour. So, the gist of this is: Avex does a lot of things that aren't profitable for Ayumi because they are clearly profitable for the label.

[ccsharumun]

Originally Posted by orbitalaspect

Labels don't have much control over their artists' touring schedule. In all actuality, the artist makes a very tiny fraction of the money generated from an album sale.

Originally Posted by orbitalaspect

Generally, artists release material through a label to promote tours, not really the other way around. If people like the songs, they end up selling more tickets and this is how the artists will make their money.

^This breakdown was spot-on (to my knowledge) in terms of how it generally works.

I would like to mention that while the Japan and US recording industries have many differences of approach, the way profits work appears very much the same. Even in the United States, most artists make their money from concerts, while labels make it from album sales. So, it really pays to be a performer (which we know Ayu is very good at, and people recognize that up to now, as her concerts still attract many, many people regardless of album sales).

I am also not certain how it works in Japan, but if it is anything like the United States, then the fact that Ayu writes all of her own lyrics means that she actually makes even more money on average than the artists who do not. Songwriter royalties make up a quite a chunk (I believe 10%) of the money each time an album or song is purchased. (And also every time one of her songs is covered by another artist and put up for sale). For instance, after Whitney Houston died, iTunes sales for her signature "I Will Always Love You" skyrocketed. But actually quite a bit of money went to Dolly Parton, who wrote the lyrics.*

So anyway my point is that Ayu's involvement with the creative process (especially lyrics) likely also means that while her profits from album sales may be small compared to that of Avex, her portion is likely more than the average artist who does not write (or compose as Ayumi did for a time as CREA).

*Not a part of the US music industry, but I have spoken to people involved and this is how it was explained to me.