As The World Tunes
Budgeting Your Compact Disc
by Steve Bussey
GeoSynchronous Records
Are you ready to press your first compact disc of your band? Before you do, take the time to plan how much you can afford to spend, and how many can you realistically expect to sell. Otherwise you may end up losing a lot of money and with a stack of CDs in the cellar (you have heard of the 3 million cellar album haven't you?).
There are many ways to approach a budget, but they are all based on how much money you have to invest, and how much income you expect to generate from sales of the CD. Your initial investments will include recording studio time, mastering, graphic design, photography or artists fees for the tray card, music licensing for songwriters (if you did not write the songs), and promotional costs. Your income will come from sales of the CD, radio air play, and any possible use of the songs for commercials, TV shows, movies, etc.
If this is your first CD, it is hard to estimate how many you will be able to sell. I have heard that are 60,000 titles released each year, and 95% sell less than a thousand copies. Of course, the other 5% include those that sell millions, but is yours going to do that? It is possible, but I would suggest planning a budget around an initial pressing of 1000; you can always order more later. You will probably give away 50 or 100 to family, close friends, and for promotional use for press and potential gigs. So you will have about 900 to sell.
And where are you going to sell them? Mostly at gigs. You may sell a few on the Internet, a few on consignment in local record stores, a few to people you know (the people that sold you their kids soccer team candy bars!). But unless you have a lot of promotional money and a powerful promotional staff, mostly it will be impulse buys at your gigs. How many gigs per month do you play? How many people attend? Can you get 5% or even 1% of them to buy your CD? How many months will it take to sell all of them? If you only play three or four gigs per month, and sell two or three CD per gig, it will take six to twelve years to sell out, if the band stays together that long!
Let's say you have a great CD, play a lot of gigs, and are not afraid to sell them from the stage. You sell all 900 at $10 each, a typical price. You might be able to sell them at more, but I think you will sell more and sell faster at a lower price. This means you will have brought in around $9000. Lets see if that will cover expenses.
CD replication is very competitive these days. Prices vary, so you have to shop around. Things affecting the cost include the number of pages in the CD booklet, type of package, graphics design, color printing, film cost for the graphics, glass mastering, and bar codes. You usually can get all of this as a complete package for $1500 to $2000 for 1000 CDs. You can shave the price down some if you do your own graphic design, or print in one color, or even eliminate the booklet and the jewel case.
So our $9000 gross sales has just dropped down to $7000. What about the studio costs for recording the CD in the first place? This is a hard one to pin down a cost, as studio rates vary widely as do the number of hours to record a complete CD. The time spent could be as little as an afternoon recording it all live, or hundreds of hours trying to get it all perfect. Studio rates can be as low as $25 an hour, or up to $200 or more. It depends on the quality of the studio. Sometimes you can even get free studio time if the owner believes in the band. A lot of people have home recording equipment these days, and most of it is decent enough to record a good sounding CD. So you might get away with no costs, or it could cost you thousands or much higher. The important thing is to plan in advance how much you want to spend on recording, and then find a way to stay within that budget.
If you have any money left, then you can plan on promotional costs for your CD. There are a lot of options available, including radio consultants, advertising, etc., but for the initial pressing of the first CD, the most effective way to sell them is to play a lot of gigs so people have a chance to hear your music, and buy it then and there while the urge is the strongest. Spend some money on a good press kit with photo, bio, CD, and any press reviews or advertising. Give one to any club or venue that you want to play in, and send it to the local newspapers and music magazines. Design and reproduce an attractive poster to give to the clubs to promote your appearance there (you can do this yourself on your own computer). Develop a mailing list to let your fans know where you are playing. Give out flyers to everyone you see with the date and times of up-coming gigs. At the gig announce from the stage that your CD is available, and be a little pushy about selling it!
This is a rather basic approach, but it seems like many bands approach the making and marketing of a CD with no budget or plan at all. If you can be successful at this first stage, then you can go on to more advanced marketing and distribution techniques for the next pressing. VH1 tells me that Motley Crue's first album cost $10,000, and it went on to become a gold record (over 500,000 sold), and they did it all themselves this same basic way. Needless to say, they got a major label deal afterwards and sold millions of their later albums. So go thru the numbers, decide how you want to do it. If the numbers do not show a profit, then re-work your plan until they do. Making money from making great music on your CD is the goal, isn1t it?
About the author: Steve Bussey is a singer/songwriter/guitarist and is currently the owner and general manager of GeoSynchronous Records (http://www.pan.com/geosync, Listening Line 800 235 9193, ask for a free catalog), an indie label handling artists such as Les Dudek, Mike Pachelli, Bong Water Taffy, and Big Red & The Bus. Prior to this, Steve earned Bachelor's and Master's degrees in Electrical Engineering and Acoustics from Georgia Tech, designed sound equipment and guitar amps for Fender, and supervised design of communication systems for the Space Shuttle at Kennedy Space Center.
