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Ever wonder how royalties work?

The music biz can be so confusing. That's why legendary former MEGADETH bassist Dave Ellefson tapes a video podcast called The Rock Shop where he disucsses various topics related to the music biz. He just posted a great 5 minute talk explaining the intricacies of royalties and getting paid in general by a label. Check it out below:

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So basically. For every CD you sell, you'll make around 2 bucks. But, before you record your CD, the label will loan you some money which you will then have to pay back out of those 2 dollar-per-CD payouts. Aren't major labels exciting?

On a related note, a few months ago, PSYOPUS guitarist Chris Arp explained how important your first week of sales are to touring.