"Music Industry Chat"

Gold Record Award Launched in 1958 "RIAA"

A few years ago I took a “Music Business” course, and today I have to admit that it was really one of the best decisions I ever made.  Throughout this time my instructor went into great detail about “what constitutes a hit record”, something I had never really thought too much about until then.  Of course, this was not the focal point of the program and he did, as one would expect, touch on many other important subjects as well.

I write about these “Music Industry Related Topics”, in hopes to help educate young “up and coming” musicians.  Like I have mentioned in the past, To survive in any market you need to thoroughly know how the system works inside and out.

So what does constitute a Hit Record?  First lets break down what goes into the release of an album or for a lack of better words, lets break down what kind of “investment” is made by a Record Label.

For example, when a new band is signed, the record company will begin by investing in the artist in a number of different ways.  Some may include a “Music Video”, “Publicist”, “Producer” and possibly a “Management Firm” among many other things.  For the sake of this brief outline, let’s say the record company has invested $500,000.00 into this newly signed act. 

I should also mention that, in many cases, new groups acquiring a contract with a label can expect to be locked in for three to five albums.  This is because, statistically, it takes most new bands three to five releases to bring in a profit for the record company.  With our example of a $500,000.00 investment for one release, we can easily understand how difficult it would be to gain a return on such an investment.

To continue with our fictitious “fortunate” band, lets now assume that an investment of $1,000,000.00 has been “spent” on the “Hopeful Success” of the groups music career. 

Back to the current question at hand, what makes a hit record?  Well … it’s entirely this simple.  If $1,000,000.00 was invested into an artist, for this release to be a “Hit”, the record company would have to see a minimum return of $1,000,000.01.  That is what constitutes a Hit. 

So what exactly makes an album “Gold or Platinum”?  This fits under what is commonly referred to as “Units Shipped or Units Sold”.  In 1958 The RIAA established this “Awards Program”, and since then has grown from “Gold to Diamond”.  

[Launched in 1958] Gold= 500,000 Copies Sold.

[Launched in 1976] Platinum= 1,000,000 Copies Sold

[Launched in 1999] Diamond= 10,000,000 Copies Sold

** Information can be found on www.riaa.com

 Tim Smith

The Soundscape Recording Studio