Valcom Inc (fka VLCO)

[tigerpac]

I like the iTunes strategy for releasing covers of Platters (or any other Valcom owned) songs.

They could do the same with ring tones I guess.

The big problem is how much would Valcom earn for each song?

Valcom would only get paid based upon the songwriting credit..they own the Platters music. Young MC gets paid the artist royalty, the producer Joel Wertman gets the producer royalty,Apple gets it standard 30% , and the remaining money usually goes to the prodction company to pay the costs of recording the song,promotion, etc which is always a black hole because it's so easily manipulated.

Attached is a link from 2007 explaining the royalties rate. While I'm sure it has changed some, it is probably not materially different. Apple still gets it's 30% cut.


http://www.musicbizacademy.com/articles/...

I think the writer's cut is about 10% of the net, Could be 9% or 12%, but for arguments sake let's call it 10%.

iTunes singles sell for .99 . Apple's cut is 30 cents. That leaves 69 cents of which the writer (Valcom) will receive 6.9 cents per download.

So if Young MC sells 100,000 downloads, Valcom will earn $6,900 before taxes. Probably not as much as you thought it would be.

If the song retail for $1.29 like some songs now do, the writer will receive 8.1 cents per down load or $8,100 per 100,000 downloads.

Valcom has the same problem that Marvel had years ago. However Marvel had a much stronger brand presence and Stan Lee.

They own a library of things but don't have the money to develop or cash in on it. Marvel had to sell off the movie rights to Spiderman, Iron Man, Hulk for a license fee because it din't have the money at the time to make these big budget movies. Yes times have changed and Marvel sold itself to Disney but I think Captain America and The Avengers movies were the first movies produced by Marvel where they could reap the entire benefits.

That's where the similarities end.Valcom's library is no match for Marvel's so there is no comparision going forward. Another company is putting up the money to make the Platter's production. Valcom just gets a small license fee and some residual DVD and CD sales which will be very little IMO.

Back to iTunes..if Young MC sells 50,000 downloads, I'd be stunned. I think 25,000 downloads is a good number to base revenue on....and that doesn't wind up being very much.

Even releasing 50 songs per year, that might make $400K max revenue .

TP