GNR Finish CD?

[Verse Chorus Verse]

If the label is going to hold it up for a while yet, that is going to really, really suck. I really hope that it's not true that they're holding it to make as much money as possible, because this album could be profitable as anything else. When the IRS demo leaked, it was charting for Christ's sake. I don't see what they could possibly fear.

[Axl4Prez2004]

Here we go. ?Perfect solution. ?This strategy involves a tie-in with NBC television and a man who knows how to sell. ?Make the marketing of Chinese Democracy a challenge between Team Empresario and Team Hydra (which happens to include Gene Simmons of Kiss-fame who could make money alone on a desert island if he had to). ?

In typical Apprentice fashion, the company that needs help (Universal) would have its execs sit down with each team and explain what needs to be done. ?The winning team is the team that comes up with the best strategy to market and release the Chinese Democracy Quadrilogy. ?Who knows, maybe even an appearance from Axl and the band to boot.

C'mon, a guy can dream can't he??? ? ?

[ppbebe]

I knew there be a lot of rumors in 2008 now

and I knew you were right.

Internet kills video stars.

Sounds like The Buggles have a new hit on their hands.  I call for a reunion.

I was referring to the line on a tee in justice's video for 'dance' .
yeah I've heard of the song video killed the radio star. I guess it was released in an age of transition as well.

[GNRreunioneventually]

i wish they'd throw us a bone or something by giving us the art work at least. You know that has to be done by now if the record lable has it.

Any numbnuts with access to it can easily upload it and therefore put them in the doghouse way further than expected... We don't have Axl's adamantium case to protect the album anymore ? ?Now it's in the hands of douches that care not about the integrity of it.

so true.......i wonder if Axl is in front of the door with an Uzi waitting.........

[GNRreunioneventually]

Here we go. ?Perfect solution. ?This strategy involves a tie-in with NBC television and a man who knows how to sell. ?Make the marketing of Chinese Democracy a challenge between Team Empresario and Team Hydra (which happens to include Gene Simmons of Kiss-fame who could make money alone on a desert island if he had to). ?

In typical Apprentice fashion, the company that needs help (Universal) would have its execs sit down with each team and explain what needs to be done. ?The winning team is the team that comes up with the best strategy to market and release the Chinese Democracy Quadrilogy. ?Who knows, maybe even an appearance from Axl and the band to boot.

C'mon, a guy can dream can't he??? ? ?

NOW I like that idea man Have Gene sell it!


if were going to dream can i sujest a tour of G'n'R and KISS?

[Voodoochild]

I dunno,in but I guess Eddie Trunk is a bit off. Why would the label hold the cd for years? It will be even harder to sell cds in the future...

It's also baseless speculation around what could be the issue between the band and the label. Maybe it's just a matter of how many albuns, for who (target) it's gonna be released, when the follow up will be released and stuff like that. Things that does take a while, but not years to work out.

[qcmyoungwill]

Here's a thought...

Maybe Axl gave them a CD containing a group of second tier songs. ?Not the best stuff the band is recording, but good enough to sell to the public.

Maybe he is hoarding all the bands best work. ?He's only obligated to 1 more record through Geffen right? ?Maybe his plan is to finish out his contract and then release all the top tier stuff on his own. ?He can get the band back into the mainstream with a Geffen release and then kick everyone in the face with the best stuff and he can reap all the rewards. ?He's got the money to do that. ?It's not like he would actually haev to produce a "Record." ?He can release it through the GNR website and make it available on iTunes. ?He'd make a killing.

And maybe Geffen is aware and saying that he needs to give them his top material.

Maybe... or maybe it's just another stupid obstacle like every other one in the past 15 years.

[AdZ]

That seems.. unlikely.

[mrbucketfoot]

Let's try the whole "Bucketfoot" insight volume two without my hilarious slurs.

Okay so lets just say as jumping off point the recording of Chinese Democracy has cost $20 million bucks.

Lets say promotion, etc. takes 3.5 million. That's a net of $23.5 Million spent on the album in general. It costs something like $100,000 for radio at most for a pretty serious campaign and about $500,000 for a primetime spot for a commercial. So, hey, we'll just assume a cool 3.5.

Say the album sells 4 million copies. Roughly $12 bucks a pop, there's $48 million dollars. Who knows how it's distributed because different people on the album in the past, but we'll assume generality for brevity's sake. Usually around 15-20% but depends on Uncle Axl's contract. I don't know if there is an individual clause for each member or just an even distribution of the money given to the band.

So assuming this, $48 million dollars from CD Sales. Lets say that the band earns 17.5% from the album sales. Then there's a high tax on the earning, so after taxes the band gets about $3,360,000. Split 8 ways you have $420,000 for each member not even including other artists who have worked on the album. Whether their one-time costs are apart of the "recording costs" or not remains to be seen. The band makes most of it's money from touring anyway. I doubt Bumblefoot is going to cry if he only pulls in half a mill. Probably get him some good protection from Dark Angel. 

That may seem slim, but this is a low number of 4 Million. Honestly, I think Chinese Democracy can hit 12 million worldwide, but hey that's me. So assuming that the record company gets 50% of this number in profit at the same 40% tax (I'm not certain if the tax on the record company differs, but I know artist tax is typically 40%). That would mean they pull in 9.6 Million.

If the album sells 8 million, the record company will get around 19.2 Million. Stadium Arcadium sold about 7 million just for reference. So assuming Chinese Democracy can sell 8 million copies, that's a deficit of 4.3 million bucks. This doesn't even include profit received from merchandising, touring, etc.

So yes, there are a lot of costs involved. Can they be overcome? Yes.

[wight gunner]

There's a big word in "IF" you have there Mr Bucketfoot? it's almost as big as "soon" nice thought though.

PS. Tax can often be offset against loses....

[cybercurves]

Let's try the whole "Bucketfoot" insight volume two without my hilarious slurs.

Okay so lets just say as jumping off point the recording of Chinese Democracy has cost $20 million bucks.

Lets say promotion, etc. takes 3.5 million. That's a net of $23.5 Million spent on the album in general. It costs something like $100,000 for radio at most for a pretty serious campaign and about $500,000 for a primetime spot for a commercial. So, hey, we'll just assume a cool 3.5.

Say the album sells 4 million copies. Roughly $12 bucks a pop, there's $48 million dollars. Who knows how it's distributed because different people on the album in the past, but we'll assume generality for brevity's sake. Usually around 15-20% but depends on Uncle Axl's contract. I don't know if there is an individual clause for each member or just an even distribution of the money given to the band.

So assuming this, $48 million dollars from CD Sales. Lets say that the band earns 17.5% from the album sales. Then there's a high tax on the earning, so after taxes the band gets about $3,360,000. Split 8 ways you have $420,000 for each member not even including other artists who have worked on the album. Whether their one-time costs are apart of the "recording costs" or not remains to be seen. The band makes most of it's money from touring anyway. I doubt Bumblefoot is going to cry if he only pulls in half a mill. Probably get him some good protection from Dark Angel.?

That may seem slim, but this is a low number of 4 Million. Honestly, I think Chinese Democracy can hit 12 million worldwide, but hey that's me. So assuming that the record company gets 50% of this number in profit at the same 40% tax (I'm not certain if the tax on the record company differs, but I know artist tax is typically 40%). That would mean they pull in 9.6 Million.

If the album sells 8 million, the record company will get around 19.2 Million. Stadium Arcadium sold about 7 million just for reference. So assuming Chinese Democracy can sell 8 million copies, that's a deficit of 4.3 million bucks. This doesn't even include profit received from merchandising, touring, etc.

So yes, there are a lot of costs involved. Can they be overcome? Yes.

There's a lot of costs involved, but not the amounts you just dreamed of

[jarmo]

Apparently this is a somewhat describing breakdown of where the money goes from a new album with a list price of $15.99:

- $0.17 Musicians? unions
- $0.80 Packaging/manufacturing
- $0.82 Publishing royalties
- $0.80 Retail profit
- $0.90 Distribution
- $1.60 Artists? royalties
- $1.70 Label profit
- $2.40 Marketing/promotion
- $2.91 Label overhead
- $3.89 Retail overhead


Now we know most albums don't retail for that much so some cuts need to be made....



/jarmo

[Bartlet]

They certainly wont split the profits each way between the band! I find that very hard to imagine. I think one man will get the lion's share of the artist's profits.

[cybercurves]

Apparently this is a somewhat describing breakdown of where the money goes from a new album with a list price of $15.99:

- $0.17 Musicians? unions
- $0.80 Packaging/manufacturing
- $0.82 Publishing royalties
- $0.80 Retail profit
- $0.90 Distribution
- $1.60 Artists? royalties
- $1.70 Label profit
- $2.40 Marketing/promotion
- $2.91 Label overhead
- $3.89 Retail overhead


Now we know most albums don't retail for that much so some cuts need to be made....



/jarmo

Well that makes a lot of sense.   Just because an album sells 4 million copies at $16 per CD doesn't necessarily mean the Label is going to pocket 64 million dollars. 

[mrbucketfoot]

Well that makes a lot of sense.   Just because an album sells 4 million copies at $16 per CD doesn't necessarily mean the Label is going to pocket 64 million dollars. 

According to Jarmo's scale, it's be 6.8 million. And no one ever said they'd get 64 million.

[Chief]

I think the touring and merch can probably offset a lot of the recording costs.. I mean, a big company could easily take out a loan to come up with the money if they had to (which they probably don't) for promo. i don't think that's a huge deal...

[Naupis]

Just some food for thought on album sales for the year 2007 from an AP article I saw:

Eagles fly high. The top-selling album of 2007? Josh Groban's Christmas set, "Noel," at 3.7 million. Second was the soundtrack of "High School Musical 2" with 2.96 million. That means the Eagles' "Long Road Out of Eden," in third with 2.6 million sold, was the top-selling album of new material by a single artist/entity. The top 10 albums of 2007 are about evenly spread among genres (rock, hip-hop, pop, R&B and country). The remaining top 10 albums include: No. 4 -- "As I Am," Alicia Keys; 5 -- "Daughtry," Daughtry; 6 -- "Hannah Montana 2: Meet Miley" soundtrack; 7 -- "Minutes to Midnight," Linkin Park; 8 -- "Dutchess," Fergie; 9 -- "Taylor Swift," Taylor Swift; 10 -- "Graduation," Kanye West.

Rap was rocked, rock rules. Rap/hip-hop experienced the biggest decline in album sales of any genre, down 30 percent (from sales of 60 million in 2006 to 42 million in 2007). Rock albums fell 12.5 percent, from 171 million to 149 million. Almost all genres -- country, R&B, jazz, alternative, Latin, etc. -- were each down by at least a double-digit percentage.

Of that list, the Eagles would be about the only artist close to the GNR situation in terms of being a big name middle aged rock band releasing new material for the first time in years. The rest of that list is populated with artists who have access to top 40 and adult contemporary formats GNR won't, and those are the 2 biggest platforms on radio.

Assuming a 10% decline in rock sales this year alone in keeping with the trend, if GNR were the top selling rock act of the year they are most likely looking at a ceiling of 2.3 million copies, and that is in the best case scenario. To assume that some how GNR will be completely immune to the retail realities facing the genre given the challenges they will face is just not realistic. 2 million in sales would be a tremendous showing all things considered.

Apparently this is a somewhat describing breakdown of where the money goes from a new album with a list price of $15.99:

- $0.17 Musicians? unions
- $0.80 Packaging/manufacturing
- $0.82 Publishing royalties
- $0.80 Retail profit
- $0.90 Distribution
- $1.60 Artists? royalties
- $1.70 Label profit
- $2.40 Marketing/promotion
- $2.91 Label overhead
- $3.89 Retail overhead


Now we know most albums don't retail for that much so some cuts need to be made....



/jarmo

According to Jarmo's chart (assuming that it is somewhat accurate and it seems very likely looking at the breakdown), with a minimum capital investment by the company of $13 million dollars (the money spent just to record the album) the would need to sell an astronmical number of CD's to even get to break even (based on the chart #'s provided it looks like they see maybe $3.00-$4.00 revenue on every album after all the other non-recording costs are considered, and that is assuming a 15.99 retail price which is completely unrealistic). When you then consider the additional money they will have to spend to promote, distribute, pay Axl, and all other new costs associated with a release that $13 million climbs even higher. ?

Any way you look at it there is almost no viable scenario in which this thing can be seen as being worth putting even 1 more dollar into, as the additional money spent from here on out won't bring in the incremental sales increases to make it worth doing compared to the opportunity costs of not using the money elsewhere. This thing will sell at least 1-1.5 million regardless of whether it is promoted or not, so putting in another million or two promo to gain at most a 500,000-700,000 incremental sales increase (under the most optimal projection) is just not worth the risk to a financially strapped company considering the downside potential if everything doesn't fall into place perfectly.

Axl has to much riding on this to just take his chances of a release with no promo. He is better off not releasing it considering how catastophic failure would be to his and Guns legacy and everything he has spent a decade doing. If the hypothetical numbers are true based on Jarmo's chart and the known 2007 year end albums sales statistics, there is little chance in the near future of the label making the financial committment Axl needs based on their likely ability to break even on this (much less be profitable).

Just like with Axl, based on their risk they are better off sitting on the album in the hopes that a more viable financial model may develop in the future as digital sales are at least showing signs of continued growth and more people become comfortable with the notion of actually paying for music again. For almost a decade now people have essentially been able to get music for free, and convincing people to buy something they can still get for free currently is a hard sell. Things are improving slowly, but at least there is finally some semblance of hope for the record companies on the horizon potentially.

Any way you look at it this is a major recipe for gridlock. We don't know anything for sure, but based on the tone of Jarmo and Mysteron's posts the past few months regaurding things "the ball being in the label's court", coupled with all the rumors from outside sources like Rolling Stone and Eddie Trunk essentially echoing the same thing it seems entirely plausible and probably likely. Without knowing the nuts and bolts it is not terribly difficult to come up with a somewhat reasonable guestimate as to the financial realities surrounding the album from the labels standpoint in regards to the desirability of it being financially worth further investment. The outlook is not rosey(pardon the pun) at all for any sort of release in the near future. It is hard to even see how any compromise to break the gridlock could be reached because both sides have entirely legitimate and reasonable grounds for the positions they appear to be taking regarding and not backing down from their current stance.

[ShotgunBlues1978]

The majority of the money spent to produce this album was spent years ago.  I'd imagine that a lot of it was recouped by the Greatest Hits which is still charting almost 4 years after its release as well as the tours the past two years.  Now they're going to have to spend a lot of money to promote the album and they will have to be creative about it because the industry is in transition right now.

The negatives:  the music industry is adjusting to new sales trends and trying to figure out how to use technology to their advantage.  Promoting CD is going to be a large and expensive process.  There are a lot of politics and egos involved and it's going to be difficult to come up with a plan where everyone involved is satisfied

The positives:  the amount of money spent on CD is not just for one album.  It's apparently 3-4 albums worth of material that they actually plan on releasing.  The large majority of that reported $13 million was spent years ago.  Greatest Hits was a huge success with minimal investment from the label and showed that the GnR brand name still sells records and has staying power.  The past two tours were successful even without an album.  GnR has a huge international fanbase that will make recouping easier for them than it is for most bands.  The curiousity around the first album will generate a lot of sales by itself.  And despite reports, the $13 million is not unprecedented or even out of the routine.  Mariah Carey had a contract with Virgin for $20 million an album, that they ended up buying out for a lump sum of $28 million because of a couple flops.  Madonna's albums have been budgeted in the 8 figure range for years.  Michael Jackson's last album cost over $30 million in production costs alone.  $13-17 million or whatever in production costs is huge, but not unprecedented, especially if 3-4 albums are culled from those sessions. 

And put it this way.  Using Jarmo's scale, let's say they release the first album, they spend $10 million promoting it, they sell 6-7 million worldwide.  Okay, the label still technically lost money overall.  But they would have made a dent in the $13-17 million investment and have 2-3 more albums worth of material that can be released.  Now let's say, all said and done, the CD sessions result in albums that cost a combined $40 million to record and market when all is told.  And let's say the label takes in $35 million.  They lost money, but they would've cut their total loss down greatly.  Then you factor in touring profits.  Then you factor in the other greatest hits and best of compilations that can be put together.  Then you factor in money that can be made by using these songs in advertisements and movie soundtracks and everything else.  These mythic recording costs are long gone, they aren't going to come back if the label doesn't release the album.  At this point, if the label can release the album and make more in sales than they spend on marketing, that's a success at this point from their POV because at least they made back some of the money they invested.  Realistically, they cannot expect to recoup or turn a profit on the investment with the first album.  You have to look at the current investment as an investment in 3 new albums, combined with the boost in sales to the old catalogue that will result from the new release, combined with the potential for more compliation albums, song use in advertising and marketing, use in movies, etc.  The only way the label can profit off if this is to look at the big picture, because obviously Chinese Democracy Volume 1 isn't going to be the thing (whether or not anything will) make them a profit off of this investment

[madagas]

exactly...nobody benefits from not releasing the album. I think it will take two albums to recoup the costs. The big thing is the first one has to be moderately successful so the band and label are confident enough to release the second one.

[mrbucketfoot]

Yes, Jarmo's chart is a good chart. ?

But seriously, even-though there are a lot of costs tied up in the album the recording costs aren't just for one album which is a strong side going for the GNR camp. So even if it's only 1 or 2 more albums of releaseable material, there won't be too many future costs in terms of recording.

The delay for whatever reason is probably for making Chinese Democracy a success. People loving the record and a new generation finding GNR. If it doesn't then not very many people will buy the follow up, regardless how good the music is. It will be GNR's 'Smile' and not GNRs 'Hell's Angels'.

So it sucks not to have the album. Bitch all you want. Fact remains, it's best for the future of the band and us as fans to wait until things are in order.