The way I see it....it all depends on the agreement and any contract signed. We do not have specialist demo companies in the UK as per the way you operate in the states.

We pay for studio time and any musicians used are paid on a work for hire principal so what we walk away with is ours to do with as we like. I do not know anyone in the UK who uses a package deal service to produce a demo

Most of the people I know and work with are live performers. They make their own CDs which they sell through various sources especially at live gigs. It is not unknown for a couple of dozen or more CDs to be sold to audiences at a gig. People do make money from selling their own stuff this way.

Each studio has a list of sessionists who can be used to add parts to songs. There are singers, guitarists, drummers etc etc. Most work on a set fee for a part or are paid an hourly rate. This is all considered work for hire. Even composing tunes to lyrics is done on a work for hire basis and there are plenty who would jump at the chance for a few quid.
I can sum it up by saying the attitude of most musicians I know here is I would rather be paid something now for my work than wait endlessly in vain for my 50% share of nothing. If the song does become a hit and make any money then my name will be on it as a cowriter and I will receive the publicity. Royalties would be down to generosity. I will take my chances.




http://www.soundclick.com/bands/songInfo.cfm?bandID=687727&songID=5238055