Poor Whitney Houston. The legend’s untimely death has been met with scrutiny over her cause of death, her prescription drug use and struggles with addiction to illegal drugs. After the untimely death of Michael Jackson, his estate made a fortune due to a sudden renewed interest in his catalogue. According to insiders, however, the same will not happen with Whitney.
“She was broke — her label gave her advances,” a record company insider told The Huffington Post. “And unlike Michael, you have to remember that Whitney didn’t write any of those massive hits. They were songs that Clive Davis told her to sing and she did.”
One of Houston’s biggest hits, “I Will Always Love You,” was actually written by Dolly Parton, who will receive the writer’s and publisher’s rates when the song undoubtedly gets a boost in radio and television performances.
“On records, the typical mechanical royalty paid to the writer/publisher is about 8 cents per radio performance,” a successful songwriter told me. “That would all go to Dolly. Whitney is only the singer. She receives an advance from the record company based upon anticipated album sales. Figure that’s around $2.00 per album. But all of the costs to record the album, promote the album, videos, etc. are all recouped from the artist’s share.”
So even though sales of her records soared the day following her death, the majority of them digital. Album sales reached 101,000 in the United States and 887,000 sales of individual songs. To give you an idea of how large of an increase this is, note that her singles sold only 15,000 the week before.
As in Houston’s case, it is very possible for artists to sell millions of records and end up owing the record label money. In fact, most artists don’t make money from record sales, but rather from ticket sales — a revenue stream that will no longer be a source of income for Whitney’s estate.
“Whitney was living off of advances — loans from the record company — and had been [for] quite some time,” the insider said. “Most likely the estate owes the record company a ton and future sales will be used to pay back that loan before any money goes to the estate. The songwriters, however, will make a bundle.”