“… One band I know well, who had a good following, put out an album on iTunes, and they calculated that if their album went platinum, then they would break even!”
If the artists publish their music themselves, they would get 70% of the revenue. If an album goes platinum, it’s sold over a million copies; even if someone sold it for a dollar, I find it unlikely that they only break even from revenues of $700,000.
Although if you self-publish, you’re might see more profit producing physical CDs and selling them at your gigs – but obviously there are more upfront costs.
If you’re on a label, it’s been estimated in the States (how this applies to the UK is another thing), that if you’re on a high end royalty deal (only the bigs acts have such deals) if a CD album is sold for $10, the band get $1. If you’re on a low end royalty deal, you’ll get a princely 30 cents for each $10 CD album sold.
However, if the act is on a label and a song is sold for 99 cents on iTunes or Amazon, they’ll get 9 cents. So if they sell ten songs, they’ll obviously get 90 cents. An album is quite often made up of ten songs, so if we use that to compare the two means of distribution, the vast majority of acts would make three times the amount of royalties from ten songs being bought via iTunes/Amazon, then if someone bought a $10 CD album containing the same songs from a store. For the likes of U2, they would see a fall in their royalties… so there are obvious losers…