If a million was spent to market an album, a label only has to get a little over 100k sales to at least get back what they invested. Anything 120k sales-wise and beyond is a profit, and that's if an entire mill was spent which is rarely the case. Most these labels end up in the green, even when the album only sells a few hundred thousand, it's just not as in the green as they'd like it to be.
360 Deals are not to recoup, it's to make up for the money labels are used to getting when artists went gold and platinum on the regular.
Plus labels "recoup" from the artist's cut. So let's say 500k was spent on an album in total, they dont consider $500,000 worth of sales as "recouping" they consider the album budget recouped when the artist themselves earn a royalty payment that adds up to $500k which is not until the album is well past gold. By then that 500k invested would have made a few million, none of which is going to the artist.
... and depending who put the money up (TRULY indie acts often use their own money) it's more of an actual loss to the artist than flopping on a major. ..If you flop on a major you may see less money on the back end in royalties and it may make it tougher to put out another album, but the label is the one eating the bulk of the loss there..it's not like you paid for anything outta pocket or you have to pay the label back outta pocket, it just counts against your budget. ..shyt like giant promotional billboards in time square don't all of a sudden become free cause you're indy..somebody is paying for it and it's cutting into profit margin more than when you're on a major. ..ashanti was just on the breakfast club talking bout losing money being independent and trying to get another major deal
