Album Sales: From Slashdot

[~cliffwalk]

An anonymous reader writes "How much does the average new album cost to produce? I have seen this cost estimated between $500,000 and $1,000,000, but some quick figuring does not support a cost this high. According to various sources (Ok, Slashdot stories…), somewhere around 27,000 albums are produced each year and 906.6 million albums are shipped. I would guess that the album retail (about $15 per album) is based on a 100% markup, so that these 906.6 million albums are sold at wholesale for about $7.50 apiece, which means that the revenue from wholesale sales is about $6.8 billion. This means that the actual production cost has to be less than $250,000 per album, otherwise the record industry is losing money. I have left out the cost of actually printing and copying the albums as I think that the average cost is probably less than $0.25 per copy."

[~Altered Flesh]

At the labels I used to work for, the average album cost $5-25k to record/produce..ect. You typically do not see a 6 figure number attached to the recording costs unless the label is banking on mainstream sucess for the cd...ie, its gonna sell at least 300k copies.