Upon Michael Jackson’s untimely death, his estate saw a flux in income due to the sudden renewed interest in his catalogue. However, the same will not happen in Whitney Houston’s passing. A record company inside reports that “she was broke – her label gave her advances,” and unlike Jackson, Houston was not the writer of any of her hit songs. It was Clive Davis, a record producer and music industry executive, who handed Whitney the tunes to belt. One of Houston’s most notable hits, “I Will Always Love You,” which was featured in the film The Bodyguard, starring Miss Houston, was actually written by country performer Dolly Parton. Parton will be the receiver of the writer’s and publisher’s rates when the song sees boosted radio and television play.
The way it works in the music industry, typical mechanical royalty is paid to the writer/publisher at about 8 cents per radio play, all of which would go to Parton as Whitney is only the singer. Singers often receive advances from the record company which are based on the anticipated album sales, averaging about $2.00 per album. However, the costs of recording and promoting an album, video, etc. are taken from the artist’s share. So, as it is in Houston’s case, while an artist may sell millions of records they may end up owing the record company money.
Artists rarely make money from record sales as it were but instead find revenue through ticket sales – an avenue no longer open to the Houston estate. The industry insider continues, "Whitney was living off of advances -- loans from the record company -- and had been [for] quite some time. 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.”