End of January 2013.

It has been three months since the "Silent Hill" album was officially released.

Due to stylistic limitations and the overall downturn in the physical record market, the sales of this album were not satisfactory.

Three full months have passed, and according to data obtained by [Quantum Music] from distributors across the country, the total retail sales of the physical album of "Silent Hill" is only about 4 million copies.

The shipment volume is barely passable. All global markets combined have approximately 11 million shipments.

However, since digital music has rapidly taken over the physical album market, most distributors will not pay all the money at once when purchasing.

Rather, it is similar to a supermarket. Part of the payment is paid in advance according to a certain ratio, and the rest will not be settled with [Quantum Music] until it is sold.

This is because the fame and reputation of the [Darkness] band and the "Rock Bible" series are here, and distributors have enough confidence in the band's works.

If it were replaced by some singers, bands, and distributors whose physical album sales were not satisfactory, they would not even pay the advance payment. They would only pay a fee to the record company for each CD sold.

This is also a sales model that has only emerged in recent years.

Let’s not mention digital music for now, let’s just talk about physical records.

Distributors on the retail side bear very high operating costs, but the profit they get from a record is much smaller.

For example, for a CD priced at US$20, the retail distributor can earn an average of 30%, which is US$6.

The record companies, singers, songwriters and producers combined can take away close to 70%.

In addition, there is a "fragment" of less than five percent that will be paid to organizations such as recording industry associations, publications management agencies, etc. The specific proportion varies according to the circumstances of each country.

For example, in the island country, there is no organization similar to the RIAA to ask for money, but their "Publications Management Agency" will take 4000% of the retail revenue of each record.

In North America, if an album is determined to be a "union certification project", then for every record sold, a sum of money must be paid to the Recording Industry Association of North America, also known as RIAA. The specific figure is 0.5 per thousand.

to between fifteen thousandths.

However, no matter which market it is in, the total amount of this "floating cost" is usually one or two percentage points, and the maximum will not exceed five percent.

Of course, this does not include tax calculation.

This is the part that the "channel party" in each link needs to bear on its own and will not be included in the total cost of an album.

It can be seen from this distribution model that the proportion of revenue earned by retail distributors from an album is not high.

Thirty percent doesn't seem low, but you know, opening a record store? The operating costs are not low.

Just relying on the money from selling records, in some countries where the physical album market is sluggish, may not even be able to make back the cost.

If the physical record market was booming in the past, it would have been okay. As long as enough records could be sold, the cost would be spread to a low enough level.

Apportioned to each record, the average cost may be less than one dollar. Calculated in this way, a "share" of five or six dollars seems quite generous.

In order to "grab" as much supply as possible, especially the first batch when the album is just released, distributors don't mind paying the price in full, and sometimes even when facing some relatively popular albums?

Take the initiative to increase prices in order to get the goods before your competitors.

but now……

All physical record stores have almost closed down. In a big city like Los Angeles, there may not even be twenty record stores in the whole city.

And the business of these twenty record stores may not be that good. Many of them are just barely able to survive.

Under such circumstances, distributors are naturally unwilling to take high risks as they did in the past.

Therefore, it has become mainstream to distribute goods first and then settle the goods after they are sold to consumers.

The record company doesn’t want to?

When most distributors reach an agreement, record companies don’t have much bargaining capital.

Unless you can build your own retail network to every corner of the world.

But this is simply impossible.

No other record company can achieve this scale.

In fact, record companies will not spend huge resources and costs to "grab" distributors.

Efforts and gains are simply not proportional.

Since I don't want to spend huge costs to build a sales network to the retail end, it is inevitable to make concessions.

In fact, for the albums of small stars, this deferred settlement sales model has been implemented for quite some time.

However, it was only in the past two years that it began to "spread" to the circle of top celebrities.

From this point, we can also see how bad the market environment for physical records is today.

"Silent Hill" is the first album by the band [Darkness] to sign a deferred settlement contract.

Judging from the performance in the first three months, the sales of this album are indeed unsatisfactory.

The retail sales of more than 4 million copies and less than 5 million copies would be reasonable if it were only in the North American market.

But if you put it on a global scale, it would seem a bit "shameful" to the "Rock Bible" series.

As for the digital side, sales volume cannot be said to be high.

After all, Spotify’s membership-on-demand payment model has become mainstream today.

For fans, if they can listen to almost any song for only a dozen dollars a month, why should they spend a few dollars per song to "permanently buy out" it?

Of course, from an income perspective, this model will not make the band much less money.

Spotify is in contact with the band's manager, hoping to buy out the exclusive licensing of all the band's works on the digital music platform.

However, there are big differences between the two parties on price.

Spotify is only willing to offer 30 million US dollars per year, plus a fee based on the number of pay-per-view users.

The brokerage team headed by Theodore quoted a "sky-high price" of US$150 million per year.

With such a huge gap, both parties have to make considerable compromises if they want to successfully reach an agreement.

It is estimated that there will be no results for at least a few months.

But if this agreement is successfully signed, the band's income from copyrights will increase significantly.

Although, the band no longer cares much about how much money they make, since they have nowhere to spend it anyway.

But no one always thinks they have too much money.

In fact, at present, the copyright fees paid by digital music platforms are not the "biggest part" of music copyright income.

At least not for the band [Darkness].

After all, rock music is very suitable for use in film soundtracks and the like.

The crews of those summer blockbusters are often willing to invest in this aspect.

It is normal to earn millions of dollars from a one-time license for a song.

Not only movies, but many sports events, commercial advertisements, etc. also like to purchase ready-made copyrights to use.

For example, the song "You'll Never Walk Alone" that was supposed to belong to the Red Army Liverpool was bought by the NFL, which pays the band a licensing fee of US$5 million every season.

The income from one or two authorizations does not seem to be much.

But when the numbers add up, it's quite impressive.

These licenses are the band’s main source of income in terms of copyright income.

As for the income from digital music platforms, although it is not so small that it can be ignored casually, at least for now, it is indeed not the band's main source of income.

Judging from the situation investigated by [Quantum Music], it is almost impossible to get Spotify to agree to sign a copyright agreement worth US$150 million per year.

In fact, thirty million dollars per year is already the top "salary" in today's music industry.

(Note: The copyright owner is referring to Drake. In 2016, Drake revealed that the copyright fee he obtained from the streaming media platform was approximately US$23 million per year, which was almost the highest level at the time. Even if there were others higher than him, it would not be the same.

It would be too high.)

Ahem, that's too far off topic.

Back to the album "Silent Hill".

Whether it is a physical record or a digital performance, the performance of "Silent Hill" is hardly satisfactory.

There was even news from [Quantum Music] that made Roger feel quite depressed.

As usual, [Quantum Music] has prepared a special "limited edition" vinyl record for the "Silent Hill" album, which contains the "bonus single" "Angel's Room" and the four members of the band.

There are "bonuses" such as a badge with comic avatars, a commemorative card signed by four people, etc.

——Of course, the signature is copied.

Like previous works in the "Rock Bible" series, this set of limited edition vinyl records is priced at US$1,299, which is twenty times more expensive than ordinary vinyl records.

However, the circulation has been reduced a lot, with "only" 100,000 copies issued.

However, these 100,000 limited edition sets have not been sold out even after three months.

According to statistics collected by [Quantum Music], as of now, there are almost more than 20,000 sets of limited edition vinyl records that have not been sold.

More than 20,000 sets of limited edition vinyl records represent more than 20 million US dollars.
To be continued...