RS 2 Planet Money Katy Perry

This is my take on the Planet Money Podcast about Katy Perry.

This podcast did a good job of breaking down how an aspect of the music business works. Katy Perry is a hugely successful artist and I thought it was a really interesting comparison that they made between her and Michael Jackson. Katy Perry just broke his record of Number 1 singles from the same album, but in terms of making money, Michael Jackson made a lot more money from his album then she did from hers. This is because there are a lot more things to be paid for and taken into account now when determining the profit from an album.

Among the many things a record company have to pay for now are royalties for brands mentioned in the songs, like Mustang and Radiohead in one of her songs. They also have to pay for things like radio play time, they also have to pay for Itunes when the songs are sold there, Katy Perry herself gets a cut of it also the writers get some of the cut as well and so on.

The part that I thought was shocking was that, when they quickly calculated how much money they made from her album. The amount they came up with just from sales was $44 Million and after taking away all of the costs and royalties they had an amount around $8 Million. In this podcast Katy Perry was touted as an experiment that turned out perfectly. Even though $8 Million is a lot of money, for an artist that is as successful as Katy Perry you would expect more money to be made on such a successful album.

When a rep from her record company was asked if they made back the money they spent on the record he gave vague answers like "as far as I know". They compared that to Michael Jackson and his record, Thriller. They said that if you asked his record company executive you would get an answer like absolutely because he had a tremendous amount of money coming in.

I think the thing that is creating the difference here is the amount of things record companies have to pay for these days. Katy Perry and Michael Jackson are both once in a generation artist, even if it is in different ways. They both had hugely successful albums and multiple number 1 singles and even though money works a little differently these days, they both should have been "bathing in champagne" like they said Jackson's record company was. So I think the thing that is creating the difference is everything that needs to be paid for these days. Companies these days have to pay for a lot and although Jackson's companies had to pay for things too, they didn't have to pay for the amount of things or didn't have to pay as much and that is what created the difference. Jackson and Perry are both unique and successful artists, but the key difference is all of the little things that add up to a big difference. It is what is really hurting the record industry these days and what created such a huge difference in the bottom line between these two artists and their success.