With radio choosing the more traditional, popular favorites, and the prohibitive expense of video production and other promotional devices, getting a record to the fans is extremely difficult and expensive. Under the present recording industry paradigm, large recording companies . An artist receives an advance and a small percentage of royalties. Although the advance is not refundable, it is recoupable against royalties, meaning that the artists receive no additional money until the labels have received sufficient profit to cover their expenses plus the amount of the advance. The costs of recording an album are relatively low.
Many bands can afford to create their own recordings.
What they can't afford under the traditional system are the marketing and promotional costs. For example, the record labels give free CDs to retail stores and radio stations, plus . . . The label produces an inventory of CDs that may or may not be sold. The label charges the cost of the CD and the payment to the retail store or radio station against the artist's royalties, even though the artist may be earning royalties of only a few cents on the dollar. Exposure to the listening public is key to driving sales.