contrary to popular belief the music industry is not a get rich quick scheme. some ppl become jaded and lose hope and some just get bitter and call the system bureaucratic and at times insinuate that it is fascist and being run by money mongers - which i find to be rather miseducated. as with every business the industry has to be self-sustaining and the expectant result is to make a profit.
with the first album, artits feel that they should be able to live the lavish lives they have so long wished for but things don´t work out that way. the first album including studio time, publicity (tours and launches) is a risk for the record company and even though it may be a calculated risk; it could well turn out to be a horriblely mis-calculated risk ensuring that the company loses money. from the income generated by the artist from cd sales, the record company has first dibs on the income to recoup all their expenses before even deducting their percentage - leaving the artist with very little money unless that artist has broken sales records with their initial offering. then there are the freebies for the media and radio stations which aren´t paid for by the company but the artist in many instances.
depending on how the first record was recieved, a retainer which is payable to the artist could be adjusted at the company´s discretion. some artists aren´t getting enough in retainers to sustain them and that is a damn shame; then there are personal publicists and personal stylists for those who enjoy looking like a million bucks even though their bank balances state very much to the contrary. some companies make the artists sign album-to-album deals which means that the terms are negotiable after every album released and more often than not we arrive at a situation where the retainer received by the artist is adjusted.
i believe that the problem with wannabe muso´s is the fact that many approach record companies with demo´s and aren´t even able to tell you the difference between a chord and a note. most can´t write music and thus lose out on the possibility of gaining royalties for their compositions. negotiate terms that will suit you as an artist and a later stage try and get full creative control of your music and fight to own your publishing rights for your music...
i´ve said my peace... :-)