An advance is a type of loan that serves as income for the artist or songwriter as they record or write songs and wait for royalties to generate revenue. These advances are essentially investments. In the case of recording artists, the label is investing in the artist by paying upfront so the artist can record and tour yet still pay their bills. Advances can also include the costs incurred by the artist before royalties begin rolling in. These advances must be paid back to the label.
The New Formula for Success in the Music Business
The old method of promoting a new act in the music business was for a record company to invest at least $500,000 in studio time with a good producer, the cost of a good video, the advertising budget, and the cost of the first promotional road tour.
