It's like Jarvis Cocker said, if you are on a major label like EMI and you release a successful album, the artist who made it is lucky if they get 30p for each album sold.
Albums are sold to stores like HMV not much less than what they sell them on the shelves. Deals are also often made, retailers can return stock in exchange for other stock. Other deals such as the label selling x number of CDS at a really cheap price and if the retailer can shift them within a time frame they will offer additional copies or other albums at the same price. This is one reason why a lot of stuff in HMV is mispriced. There is also promotional stock and that applies to DVDs too. That's why a lot of places can sell CDs and DVDs cheap for a limited time because they are buying them cheap at that time but once that time frame is up the price goes back to normal.
As for royaltys, it will depend on the deal. Some artists have publishing deals which gives them extra royaltys, if their song is used on TV at any time, on a tv programme or an advert they will get paid everytime it's shown, same if it's played on radio. The writers make all the money so if you write your own music than that is a separate royalty. Musicians and and producers can also get royaltys if they do the right kind of deal. You have the kind of producers that produce all the big pop and dance numbers in the chart right now charging all sorts for their beats. Some will take a one off fee, give you your beat or send it to your manager/label and that's the last you will hear from them. Others will wanna work with you and will want a publishing contract with that song they have produced. That means you no longer own that song, of course no artists really own their own music, the record label does but artists do have a say in what is done with their music and if they allow a producer that kind of deal that means that producer not only gets royaltys but has a say in who can use it/ what they can do with it etc etc and some artists just don't want producers/musicians to have that kind of control over their work.
Then there is the cost of production. In the movie world it currently costs the big companies like Sony Tri Star and Warner Bros 7p to press a DVD disc. So take a guess how much it costs to press a CD. As for cases? Look on Google, look on Ebay, look in Poundland and guess how much you think it costs to make CD cases. Inlays? Well i know people in self publishing and i know they can print me a 400 page book for £1.25.........so with a big multi million pound record label in control..........how much do you think it costs them to print those little booklets? Go back to the music side of things for just a second and look at vinyl. In America currently, to produce a vinyl album along with the sleeves and cover in total is 62 cents, how much is that in pennys? The actual vinyl record itself is about 12 cents to make but 62 is the full thing, full artwork cover, inner sleeve, everything. And the retailers sell them $10 upwards and it costs less than a dollar to produce. It costs movie companies 7p to print a DVD disc. Add everything else in and it doesn't take a large leap of faith to come to the conclusion that it costs less than £1 to make a CD album. Record labels are definately making their money.
That's why Jarvis Cocker is on Rough Trade. Indie labels do the legwork. The royalties are better. No dodgy dealings with HMV, just supply and demand at a certain price and the artist gets a good deal on each CD/Vinyl sold. None of these big pressing factories that churn out thousands of discs per day at the cost of pennies and then your lucky if you even see any of those pennies.
I went into Fopp the other day. They had Amy Winehouses new album on CD for £14.99 and the album on vinyl for £22. And they had lots of other chart albums on CD and vinyl. If i go there tomorrow and pay £22 for the album on vinyl, once we take the £1 off for the charity, how much do you think goes into Fopp's pockets and how much goes into her record label's? 62 cents, i'm guessing 30p at most to make that vinyl album. Fopp sell it for £22. It's £18 on Uvinyl.co.uk (Universal Music's vinyl store). 30p to make it. You're fooling yourselves if you think these record labels are poor.