How Much Does It Cost to Make A Hit Song?

Derek is an MBA in entrepreneurship, painter, and bassist for Onward We March, a local progressive metal band. He teaches business skills to artists and writes weekly music business advice for his blog Derek Thinks Music. Got a business question about your art? Shoot him an email at derekmiller5@gmail.com

According to this NPR article on the Rhianna song “Man Down”, it costs $1,000,000.
Some highlights:

-Pay to Play (aka Payola) never disappeared. 
Majors labels are venture capital firms, and they need smash hits to cover all the money they’ve spent on their unsuccessful artists. And it’s in the interest of radio to convince the music industry that it’s THE kingmaker. “Court us, or suffer irrelevance!”

‘Treating the radio guys nice’ is a very fuzzy cost. It can mean taking the program directors of major market stations to nice dinners. It can mean flying your artist in to do a free show at a station in order to generate more spots on a radio playlist.

Former program director Paul Porter, who co-founded the media watchdog group Industry Ears, says it’s not that record labels pay outright for a song. They pay to establish relationships so that when they are pushing a record, they will come first.

Porter says shortly after he started working as a programmer for BET about 10 years ago, he received $40,000.00 in hundred-dollar bills in a Fed-Ex envelope.

Current program directors told me this isn’t happening anymore. They say their playlists are made through market research on what their listeners want to hear.”

-If you’re a DIY artist, radio is a waste of your time and money. 

Radio plays what majors push, it’s a symbiotic relationship (even though labels HATED radio initially and used the same arguements that level against today’s music piracy). With competition for listener’s ears from iPods, satellite radio and internet radio, advertising dollars in radio aren’t what they used to be. The cash has to come from somewhere.

The return on investment for radio plays doesn’t make sense for a DIY musician. You’d be throwing your money away at what is essentially bribes, when you could hire a manager or a publicist at a fraction of the cost and have a much bigger impact on your fan base through targeted marketing.

One caveat: Sometimes radio will play more independant music, but only once the listeners begin demanding to hear the music. It’s cheaper and better to have your fans convince radio through their voice than you trying to convince radio through your wallet.Let’s be fair to radio, though. If I could figure out a way to legally get $40 thousand dollars sent to me without any questions asked, I’d be all over that like mayo on a gas station tuna salad sandwich.

-The major labels are built on old economics.

Too much overhead.

Back when there were only a few major distribution channels in the 50s, you could reasonably count on huge acts selling tons of CDs because there weren’t as many bands to choose from. Now that there’s an infinite number of bands, the industry isn’t concentrated anymore. You can’t “gurantee” a hit even by throwing millions of dollars at it (the Rhianna song has been met with lukewarm reception and flagging profits). A fan doesn’t have to have taste dictated by the masses anymore, hence the arrival of fantastic niche players in genres such as Gypsy Punk and Cello Rock.

Good for our ears, bad for majors.

-Throwing dollars at a mediocre song can only do so much.

Have you guys even listenered to her new song?

“rum pa pum pum pum”…

Come on now.

Music is about the music.

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One Response to “How Much Does It Cost to Make A Hit Song?”

  1. Derek, I love reading your stuff. (And now I’m signing off to go explore Gypsy Punk)

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