If you are one of those upcoming artists that have been wondering and asking how much do record labels pay artists in Nigeria? then this article is for you.
And I really hope you will stick and read it to the end to be able to really understand how much record labels pay artists in Nigeria.
But before we attempt to answer this question, we need to understand how record labels in Nigeria are making their money, as well as how they are spending on their artist.
Because it is those statistics that will help us to figure out how much these record labels are able to pay their artists in Nigeria.
How Much Do Record Label Pay Artists In Nigeria?
Record labels in Nigeria have no fixed amount of money they pay artists, but an artist is expected to get an advance around 3,000,000 (Three million Naira) and 10,000,000 (ten million Naira), including a rented apartment, car and wardrobe allowance depending on how many years the contract is going to last.
But if you are loyal to the label and have a good business relationship; you can make more money as your career progresses.
Typically, after being signed to a record label; a musical artist will receive some form of money which is known as “an advance”, to make a record.
And after the record is released, the label is going to keep all the money until they have recouped all their expenses for the record to be successful, and this includes the advance, recording costs, promotion, and legal fees.
Now, after all these costs have been recovered or recouped; the label will keep a percentage of the record sale profits.
And mind you, the artiste has gotten his own share of the profit from the advance paid earlier.
But the increasingly popular 360 deal works quite differently.
In the 360 deal, the artist who is signed to the record label becomes “business partner” in all endeavors, meaning that the label gets a cut of any profits the artists make, even those that are not related to recording sales.”
do record labels pay artists monthly?
Record labels do not pay artist monthly, rather they have 2 forms of payment which are “Outright and Royalty”.
- Outright payment is a particular amount of money agreed and paid to the artist by the record label as the fee for buying his musical recordings.
- Royalty is the percentage of money an artists receives from the sales of his musical recordings from a record label.
How record labels in Nigeria are making their money.
First and foremost, we need to understand that record labels in Nigeria are owned and run by top business executives and artists who possess a very strong business mindset.
Most of these business executives own and run other businesses or enterprises and really know what it means or what it takes to make money.
One such business mogul is E-Money who owns 5-star music record label.
On the other hand, most of the richest record labels in Nigeria, as we said earlier; are owned by A-List artists who themselves were once signed to a particular record label that made them famous.
Examples of such artists are Olamide who owns the YBNL record, Davido who owns DMW records, Wizkid who owns Starboy Records, etc.
Now, these A-List artists while being signed to their former record label had the opportunity of learning about how record labels make money.
And now that they have their own record label; they are using those experiences to earn so much money for their own record label.
Without mincing words, record labels in Nigeria make their money in the following ways:
- Record labels in Nigeria make money by simply selling records, whether offline or online. There are different kinds of royalties that record labels collect when a record they own is played on the radio or streamed in digital stores in this modern era, or is being sold in a record shop.
- Secondly, Record labels make money by marketing and investing heavily in their products; which are mainly the artist & their music. This means that record labels make money from every aspect of an artist’s career.
What is a 360 Record deal?
There’s this kind of deal that has been around for a while and it is called the 360 deal.
A 360 deal simply implies that the record labels will participate in all aspects of an artist’s career, like live performances, touring, merchandising, etc.
Therefore, a record label is definitely going to make money from every action an artist takes that involves getting or making income.
Now let’s move on to see how record labels in Nigeria spend on their artists.
How record labels in Nigeria spend on their artiste.
Cost of recording.
For upcoming or smaller record labels that have no recording studio, the cost of recording music for their artist can range from 100k to 200k per single, and 500k to 1 Million for an album.
For bigger labels that own a recording studio, the average cost can range from 300K to 500K or less.
Now, the most important thing you need to understand in this case is that the artist is going to bear this debt which will be recouped or repaid from royalties when the record is sold.
Cost of manufacturing.
The manufacturing in the music-making process is going to be the CD mas production, Graphics design or artwork, CD jackets, alongside posters, banners, Flex, T-shirts, Caps, etc that is going to serve as promotional items.
This cost may amount to 2 or 5 million at most.
Basically, there are 2 royalties that record labels have to pay and they are:
- Royalties paid to the artist
- Royalties are paid to music composers and publishers.
In either case, the artist may receive 10 to 15% while the composers and publishers may receive 30% or more.
However, this will all depend on if the artiste is not writing or composing his or her own music.
The cost of music promotion.
For the artist to go viral and bring in money for the record label; his music needs a lot of promotion.
Music promotion simply means creating awareness for music made by an artist or musician.
The cost of promotion may include but is not limited to advertising, radio promotion, shooting of music videos, touring, etc.
It is worth noting that the cost of music promotion will be recouped from the artists’ royalties, but again it will all depend on the terms of the contractual agreements.