How do varying options affect the level of sales required to break even?

Simply put the more money you spend in the recording and marketing process of producing an album the more CDs you will have to sell to break even. Similarly if you spend less money in the recording and marketing process you dont have to sell as many CDs to break even.

Many options affect how many CDs you need to break even and it all comes down to how much you spend on the album. If you go minimalistic and only really pay for manufacturing and some artwork for said album you wont need to sell as many to break even because you havent spent as much. However if you spend money on paid promotion and distribution and maybe make some music videos the amount you have spent will go up and in turn you will have to sell more copies to break even. Its all about how much you decide to spend and if you think the CD will sell well.

Example:

Using Domino records as an example here the typical amount of money Lawrence B would spend to produce around 1000compies of an album would be around 4200 including distribution, PR companies and artwork. So in this example he only had to sell 760 CDS to break even and anything over that would be profit.

But if we upscale this for when Lawrence B signed Franz Ferdinand he manufactured 15,000CDS and his total cost for making this album was 76,500. This included paid advertising, tour support, two music videos, radio/TV pluggers, manufacturing and artwork and press promotion. So because this has scaled up from a cost of 4200 to 76,500 Lawrence B needed to sell 13900 copies at 5.52 to break even.

The Flexibility of the independent label model

Before I start talking about the flexibility of the independent record label I first need to state the differences between the independent label and the major label quickly. The main difference between the indie label and the major label is that major labels all have in house staff that are paid on a salary. This means that if the label needs to get some promotion they would already have people they are paying to do that for them. The difference is that an indie label doesnt have any in house staff. The indie label for example will have to pay for promotion only for the time they are needed. The indie label doesnt have to pay them all year round even if they arent being used.

This is why the independent label is much more flexible than the major labels. The independent label can scale their budgets depending on how much they want to spend on the album release. Using domino records as an example again they would normally spend around 4200 on an album release but when domino records thought he could sell much more he scaled up the total budget to 76,500. This is quite a drastic change but it shows you just how flexible the indie label can be. Domino records went from normally trying to sell 760 copies for an album to break even to having to sell 13900 copies to break even. So if Domino records suddenly found an act where they thought they could sell millions of copies he could take out a loan and just upscale the production budget again. This is the reason indie labels are flexible in their budgets.

My Project: MaplesFor this project I will make 5-6 songs made completely out of found sound, samples and whatever random objects I get a sound from.

Recording costs: 0.00 I will be using the college studios to do all my recording, mixing and mastering.

Promotion: 0.00 my promotion will mainly be done on social media websites. I will use Facebook/Twitter/Tumblr/Soundcloud etc. I will also send my songs to some music promoters on youtube.

Manufacture: 9.92 I will buy 50 blank CDs from amazon and will also buy a 100 set of plastic CD sleeves. I will print of the album art myself and will burn my music onto the CDs myself.

Marketing: 0.00 I plan to distribute the CDs around swanley in places like bus stops with links to my soundcloud on the back. I also plan to put links to my soundcloud with this album on Facebook/Twitter/tumblr etc. I will also put up my album on bandcamp with a pay what you want download.