How Labels And Artists Divvy Up Your Dollar Online 513
Subliminal Fusion writes "Business 2.0 has an article that breaks down where that $1 goes when you buy a song from iTunes or other online music services. Key figures: the site takes .40, the labels take .30 and the artists get a measly 12 cents for each download."
it should be 50/50 (Score:5, Insightful)
Re:it should be 50/50 (Score:5, Informative)
the site takes
the labels take
the labels take another 12 cents from the artist's share to recoup "production advances" and "independent promotion"
The artist gets shit until they've sold the first few million CD's. Only then, they get to keep their 12c.
Lousy deals and the death of the album. (Score:5, Interesting)
This is completely and totally true. $0.12 is actually PROGRESS when compared to the status quo. Here's a better breakdown of the whole situation, courtesy record producer Steve Albini:
http://www.negativland.com/albini.html [negativland.com]
As far as the whiners about "the death of the album" go, two things wrong with their premises:
- Up until the 1970s that's the way radio and records went. Top 40 Radio created a singles-oriented business, with the album as gravy. Even with great albums like Sgt. Pepper the Beatles made sure there was at least one good single on there if not a few. It was only with the popularity of Album Oriented Radio in the 1970s that things changed. The last gasp of the single 45rpm record as a mass consumer good was in the early 1980s.
- The primacy of the album has been basically stood on its head in the first decade of the 21st century. The average CD has you back in the '60s again, with albums that have one or two good songs and an ocean of filler. Some of the people complaining on that list are guilty of this crime against the music consumer.
All that Steve Jobs is doing is levelling the playing field for the consumer. You have never been prevented from downloading a whole album on iTunes...in fact, you get an economic incentive to do so with the $9.99 bargain "album" rate. If a band makes a super-bitchen album, and people hear that the album is great as a whole, they will download the whole album rather than download the songs piecemeal without the advantage of the bulk rate.The fact of the matter is that the "album" died years ago. Deal with it.
You're fogetting... (Score:5, Informative)
Another thing to remember is that Itunes is an unprecidented success in the industry. Say what you will about it, but they're still only targeting 2% of the computing population...
Re:You're fogetting... (Score:5, Informative)
Re:You're fogetting... (Score:5, Interesting)
1.I know this sounds like flaimbait, but Mac users will buy anything Steve Jobs tells them is good. (I admit it, I really want to get a 17 inch powerbook) 2.They are used to paying full price for things having to do with technology, because Apple products and peripherals don't go on sale. 3.They have proven that they like the product, with the iPod being as successful as it was. (Even before the windows versions)
That is why the iTunes music store was such an unprecidented success. It was not just sheer luck.
Re:You're fogetting... (Score:4, Insightful)
Re:You're fogetting... (Score:3, Interesting)
One of my bands has songs up on mp3 [mp3s.com].
I'm not sure how many plays we've had. It currently shows 4,500 and we probably will never see a dime from them. They used to have an earnings page but the amount of songs played and the amount of money they owe us would change.
I used to send them the same email every month for a year asking about it. They'd respond "you'll get an answer in 6 to 10 business days". They changed that in a wise decision that you
Artists are getting exactly what they deserve. (Score:5, Insightful)
If I'm Jimmy Drummaster, an aspiring upcoming musician, and I don't feel that the promotion and management services provided are worth what current sellers are asking, I'm more than free to set up my own website and sell MP3s. Hell, I'd be selling to a larger market segment than iTunes is (far more people can play MP3s than use Macs).
I'm not trying to be deliberately callous -- I'm simply saying that if musicians don't like iTunes, they can choose a different route. (Of course, there are those that have sold contracts to put out n albums -- stupid sort of deal IMHO, but such is life -- and they'll have to put out n more CDs before they go freelance. And again, they got what they asked for.)
Nobody is shedding tears for *other* classes of workers that don't get better deals than they asked for -- computer consultants or plumbers or proctologists aren't getting any love.
My personal guess is that the people writing the article don't care about the musician *either* and just has some vague ideas that enough undirected protest will somehow result in him getting free music of the caliber he's currently enjoying.
Re:Artists are getting exactly what they deserve. (Score:5, Interesting)
Stupid analogy time: A smooth-talking salesman could probably talk me into buying whatever kind of car he wants me to buy, because I don't know enough about the technology and the industry. The recording industry is an enigmatic industry to outsiders, and if an artist doesn't have previous expereince or friends on the inside, he must improvise everything. Only the smart, lucky or connected artists can come out on top.
Re:Artists are getting exactly what they deserve. (Score:3, Insightful)
How it should work is th
Re:Artists are getting exactly what they deserve. (Score:3, Interesting)
The reality of the matter is that letters of intent are binding if and only if all material terms of the agreement were worked out prior to the signing of the letter of intent. There isn't a state in the U.S. where "let's make a deal" written on a napkin wo
I've always thought... (Score:5, Insightful)
Re:I've always thought... (Score:3, Interesting)
Unfortunately, unless you are the Rolling Stones or Phish (or the like), bands don't break even on touring.
Re:I've always thought... (Score:4, Insightful)
the artists don't make money on CD sales...
the artists don't make money on touring...
How then, do the fucking artists eat?
I've known a LOT of performers in my day. Some are still in bands, some are long since retired. And even the (serious) ones who "never made it" mad(k)e money on touring.
Have you seen the Courtney Love Salon article (Score:4, Interesting)
Courtney Love Does the Math [salon.com]
Re:I've always thought... (Score:3, Funny)
Thats way less then the artists get from Kazaa. (Score:5, Funny)
who's the dumbass? (Score:2, Informative)
Re:0/0 != 100%, it is undefined, dumbass (Score:2, Interesting)
(It all depends on how you ask the question. If you ask "How much is 100% of 0?" you have a well defined answer. If you ask, "What percentage of 0 is 0?" you have a problem with division. The solution: be a little more charitable and allow yourself to laugh every once in a while.)
"measly"? (Score:5, Insightful)
IMHO, "measly" would if they got three cents and the labels got fifty seven cents.
Of course, if they went independent, they'd get 60 [assuming the sites still charged 40 cents].
Re:"measly"? (Score:5, Insightful)
Re:"measly"? (Score:4, Insightful)
The promotion and financing functions of the record industry will probably always be necessary, especially the promotion part. How many songs are you going to sell through iTunes if no one's heard of you?
Re:"measly"? (Score:3, Insightful)
I heard so much new music on their it was incredible... They gave exposure to all the bands/artists that posted work on their site and made it easy to find by spliting them into categories... New artists were lsited on each page of the site (like the main page listed all t
Interesting math... (Score:2, Insightful)
Re:Interesting math... (Score:2, Informative)
Re:Interesting math... (Score:5, Funny)
Re:Interesting math... (Score:4, Funny)
RTFA (Score:3)
Re:Interesting math... (Score:2, Funny)
Re:Interesting math... (Score:2)
56 + 32 = 98 (Hint! Hint!)
how is it (Score:3, Interesting)
Re:how is it (Score:2)
Re:how is it (Score:5, Informative)
Interesting question. I was wondering that myself.
Not many people outside the music industry are aware that retail sales are the only revenue stream. For one thing, there's something called mechanical royalties, a fee of 7.5 cents per song per unit that's paid to the songwriter (not the performer, unless they are the same person or persons). BTW, the term mechanical originally referred to player piano rolls, and goes back over a century.
If a band releases an album of all "cover" songs, all the mechanical royalties go to the songwriters.
There's also performance royalties, money paid to the songwriter from radio and television airplay (as well as jukebox placements and clubs that employ cover bands). The recent controversy surrounding streaming webcasts involved these. Performance royalties are administered by ASCAP, BMI, and SECAM, organizations that collect fees from radio and television stations (and clubs and jukebox vendors) and disburse these monies to songwriters according to a formula based on the number of plays multiplied by the potential number of listeners.
Other revenue streams include synchronization rights (the use of musical works in a movie soundtrack) and transcription royalties (use of musical works in advertisements).
For all but the most popular bands and songwriters, these royalty payments don't amount to much, but even a "one hit wonder" might see a jackpot if their song hits the Top 40 or ends up in a movie or a television commercial.
The canonical/apocryphal royalty success story is that of Paul Anka, who wrote the theme for Johnny Carson's Tonight Show, and earned over $700 each week from performance royalties simply by having that tune played on every NBC affiliate in the country five nights each week.
k.
Artists should skip the label part! (Score:3, Insightful)
Of course, the hard part is getting started...
Re:Artists should skip the label part! (Score:2)
Great idea, now go convince Apple to accept music from unsigned artists.
Re:Artists should skip the label part! (Score:3, Insightful)
Re:Artists should skip the label part! (Score:4, Informative)
Re:Artists should skip the label part! (Score:2)
Re:Artists should skip the label part! (Score:5, Insightful)
The answer is that without the publicity and promotion that the major labels provide, you simply can't get the exposure necessary to really 'make it big'.
Sure you could go direct to Apple and many people do go direct to MP3.com but you just won't get the downloads without the exposure. I am involved with a few bands in Australia, some signed to big labels and some going it alone and without fail, the servicing that the signed bands get is the difference between the success of the bands. The major factor being that if you aren't signed, you simply don't get airplay on the radio. Even on Australia's 'indie' radio station TripleJ, the DJs themselves get the option to play 3 tracks of their choice in a 3 hour shift. The rest is dictated to them by managament, which in turn is dictated by how much the labels are willing to pay the station. Payola is well and truly still alive.
So despite the fact that its eminently possible to record your own album at home in small recording studio and produce a product that the 'unwashed masses' couldn't tell from a studio recorded album, you just won't make it big without label backing.
Re:Artists should skip the label part! (Score:3, Informative)
It's possible to g
Re:Artists should skip the label part! (Score:5, Informative)
Apple iTunes is paying the label 65 cents per download, (as reported many places). Of that we can pass almost all of it to the artist, since we're not a record label, and have no up-front expenses.
You can see my notes on Apple's meeting with independent record labels here (pt 1) [cdbaby.org] and here (pt 2) [gnutellanews.com].
Re:Artists should skip the label part! (Score:2)
That seems fair... (Score:5, Funny)
It adds up!
Isn't that a step up? (Score:5, Interesting)
Re:Isn't that a step up? (Score:2)
So, while they slowly pay off the advance the record company applies it's 30+% to it's profit margin...
Re:Isn't that a step up? (Score:2)
Maybe you're not familiar with the concept of "advance."
An advance is an interest-free loan from the producer to the artist against the earnings of the album.
Re:Isn't that a step up? (Score:5, Informative)
the artists get a measly 12 cents for each download.
From all the articles there have been about the artists under the RIAA, 12% is a hell of a lot better than the cut they get normally. Sure, it's measly, but it's probably a step up. Here's to hoping it'll increase.
According to one of the best articles written on the subject [janisian.com], it's a big step up.Measly 12%? (Score:5, Interesting)
Re:Measly 12%? (Score:5, Insightful)
So, it would seem that the online price is in-line with cd sales. To be honest, though, I find myself torn as to whether this is fair or not.
In the extreme example, take a band like N' Sync. These bands are obviously manufactured by the record label. They came into existense as a result of casting calls. Their music was written for them. They were provided with singing coaches, dancing lessons, etc. The record company promoted them, booked their concert dates, paid for their recording time, food, lodging, and transportation. The record company also handled virtually every angle of CD manufacturing and distribution. And don't forget the marketing machine that ensured that there would be enough radio play and media exposure such that enough pre-teens would want the CD in the first place.
So, in this instance most people would agree that the record company did at least 82% of the work (probably more). So is it unfair that some of these artists make 12%? In my estimation, the majority of major label artists fall into this category -- they weren't "discovered" so much as they were developed, honed, and trained by a music executive who knew what people would buy.
Am I over-generalizing? Yes. Do I think the music industry has become a cartel that will squash independent music and technological innovation? Most definitely. But let's be real. I like REM, but my guess is that Michael Stipe has as much business acumen as a piece of toast, and that without a major lable he'd still be plugging away at some bar in Athens, GA.
My point? I'm not sure I even have a point other than to say that 12% does sound unfair, buy maybe not THAT unfair depending on a host of other factors. I'm really more concerned about the chilling effect that the industry has on technology and the consumers' access to truly unique and different music.
Re:Measly 12%? (Score:3, Interesting)
Re:Measly 12%? (Score:5, Interesting)
packaging costs!?!?! (Score:2, Funny)
awwwww, that's so thoughtful of them...kinda like a yacht salesman saying to you..."and just for you, I won't charge you for the tired"....wha tha?
So where's the credit card companies chunk? (Score:4, Insightful)
Clearly Apple and chums have made some sort of special deal with the credit card companies, but there's no doubt there's a percentage coming out for the credit card companies.. and their chart just doesn't address it.
You could argue that it's the 'middlemen' section, but this is listed as going to subsidaries such as AOL and Amazon (in the case of certain retailers).. and I seriously doubt as if they'd fork over their whole share to VISA!
Someone with some real knowledge of merchant accounts in this capacity.. please fill us in
Re:So where's the credit card companies chunk? (Score:3, Informative)
Generally, credit card fees come out of the retailer's piece of the pie. How do they afford it? We're only talking about 2-4%. Yes, 2-4%. What about the transaction fees? While many internet merchants do pay per transaction fees for credit cards, this is not a "requirement" of the deal.
Re:So where's the credit card companies chunk? (Score:5, Informative)
Another useful fact is that the merchant contract prevents the store from requiring seperate ID beyond the card itself. However, they are allowed to ask for ID, they just aren't allowed to require ID unless they have reason to believe that the transaction is fraudulent (note, blanket policy of requiring ID from all CC users is not sufficient, that is the equivalent of saying, "if you shop at our store, we think you are trying to commit fraud" and thus is not acceptable under their merchant contract).
Some people claim that these requirements aren't fair and that in the case of minimum purchase requirements, the vendor loses money on the transaction and that in the case of not being able to require ID the vendor has to make good on fraudulent charges either directly through chargebacks or indirectly through increased fees for being a more risky business. Well, tough noogies, the store signed the contract with these terms, they have the choice of either not accepting credit cards or accepting them with the terms offered. The reason these terms are in all the contracts is that the CC companies wish to be as easy to use as cash - cash does not require an ID, and there is no minimum purchase to use cash. either.
So, stand up for your rights. Most people pay very dearly for them with the exorbitant interest rates that the CC companies charge, at least you should be able to get the benefit of the few actual contractual terms that are in your favor.
Re:So where's the credit card companies chunk? (Score:3, Informative)
Just to provide a URL so people can have something to point to (since I wasn't aware it was against credit cards rules to set minimum purchase prices)--
http://www.corporate.visa.com/footer/faqs.shtml#7 [visa.com]
Make sure to let it scroll down automatically, or click on the FAQ entry for minimum purchase to use a Visa card.
Re:So where's the credit card companies chunk? (Score:3, Informative)
And here's one for Master Card--
http://global.mastercard.com/hk/faq.html#c_cust_se rv [mastercard.com]
Same as the Visa, be sure to let it load, or just do a text search for "minimum".
Suprised? No. (Score:3, Insightful)
That's why I don't understand the tone of some people here. They seem to be waiting for the record industry to propose an acceptable solution to the filesharing fiasco before welcoming them back. The record industry, as a whole, exists to take money from you and me. If they have to destroy the computer industry to do it, they will. Instead of trying to work with the record industry, the nerds should be preparing lines of retreat. Versus the money we're facing, I don't believe we can win. Instead, we need to be working now on software tools and hardware tools that can be used without inserted DRM, etc. The hardware is especially important.
Same as album sales! (Score:5, Informative)
And thats after paying for promotion. Depressing stuff.
Re:Same as album sales! (Score:3, Informative)
Always get burned! (Score:2, Insightful)
I'd be pissed (Score:3, Funny)
Re:I'd be pissed (Score:2)
Re:I'd be pissed (Score:5, Insightful)
Oh really?
Well, let's say that you album only goes gold. That's 1 million albums sold, if you really made it big you'd most likely sell more. 1 million albums at $0.12 per song at let's say 10 songs an album equals $1.2 million in your pocket. Sure you have to pay tax, yadda yadda yadda but so does everyone. Do that once every 2 years or so and you'll make $600,000 a year. This is not counting other sales such as concerts, commercials, product endorsements, book deals, celebrity freebies, and all the other perks of being a star.
So is 12 cents sounding a little better now?
Re:I'd be pissed (Score:3, Insightful)
So, this band releases two singles and makes two videos. The two videos cost a million dollars to make and 50 percent of the video production costs are recouped out of the band's royalties.
The band gets $200,000 in tour support, which is 100 percent recoupable.
The record company spends $300,000 on independent radio promotion. You have to pay independent promotion to get your song on the radio; independent promotion is a sys
Re:I'd be pissed (Score:4, Interesting)
Courtney Love wrote about it (ok... is a b&$@#! but that is not the issue here...)
Courtney Love does the math
The controversial singer takes on record label profits, Napster and "sucka VCs."
By Courtney Love
June 14, 2000 | Today I want to talk about piracy and music. What is piracy? Piracy is the act of stealing an artist's work without any intention of paying for it. I'm not talking about Napster-type software.
I'm talking about major label recording contracts.
I want to start with a story about rock bands and record companies, and do some recording-contract math:
This story is about a bidding-war band that gets a huge deal with a 20 percent royalty rate and a million-dollar advance. (No bidding-war band ever got a 20 percent royalty, but whatever.) This is my "funny" math based on some reality and I just want to qualify it by saying I'm positive it's better math than what Edgar Bronfman Jr. [the president and CEO of Seagram, which owns Polygram] would provide.
What happens to that million dollars?
They spend half a million to record their album. That leaves the band with $500,000. They pay $100,000 to their manager for 20 percent commission. They pay $25,000 each to their lawyer and business manager.
That leaves $350,000 for the four band members to split. After $170,000 in taxes, there's $180,000 left. That comes out to $45,000 per person.
That's $45,000 to live on for a year until the record gets released.
The record is a big hit and sells a million copies. (How a bidding-war band sells a million copies of its debut record is another rant entirely, but it's based on any basic civics-class knowledge that any of us have about cartels. Put simply, the antitrust laws in this country are basically a joke, protecting us just enough to not have to re-name our park service the Phillip Morris National Park Service.)
So, this band releases two singles and makes two videos. The two videos cost a million dollars to make and 50 percent of the video production costs are recouped out of the band's royalties.
The band gets $200,000 in tour support, which is 100 percent recoupable.
The record company spends $300,000 on independent radio promotion. You have to pay independent promotion to get your song on the radio; independent promotion is a system where the record companies use middlemen so they can pretend not to know that radio stations -- the unified broadcast system -- are getting paid to play their records.
All of those independent promotion costs are charged to the band.
Since the original million-dollar advance is also recoupable, the band owes $2 million to the record company.
If all of the million records are sold at full price with no discounts or record clubs, the band earns $2 million in royalties, since their 20 percent royalty works out to $2 a record.
Two million dollars in royalties minus $2 million in recoupable expenses equals
How much does the record company make?
They grossed $11 million.
It costs $500,000 to manufacture the CDs and they advanced the band $1 million. Plus there were $1 million in video costs, $300,000 in radio promotion and $200,000 in tour support.
The company also paid $750,000 in music publishing royalties.
They spent $2.2 million on marketing. That's mostly retail advertising, but marketing also pays for those huge posters of Marilyn Manson in Times Square and the street scouts who drive around in vans handing out black Korn T-shirts and backwards baseball caps. Not to mention trips to Scores and cash for tips for all and sundry.
Add it up and the record company has spent about $4.4 million.
So their profit is $6.6 million; the band may as well be working at a 7-Eleven.
Of course, they had fun. Hearing yourself on the ra
Re:I'd be pissed (Score:4, Insightful)
Let's put this in perspective. $350,000 divided by 4 is $87,500. Now, I don't know about you but that is a lot of money to make in a year. There are people out there who earn $20,000 a year and live just fine on it. Maybe to Courtney Love that's chump change because she won't be able to support her coke habit but for the rest of us we could live pretty good off of $87,500 pre-tax.
I'm sure that music videos can and do cost that much to make, but let's look at this a different way. Music videos are what, 5 minutes each? So we are talking about spending one million dollars on 10 minutes of video. There are independent film makers out there that make pretty damn good two-hour movies for well under a million. How about you hire someone young, hungry, and promising who doesn't cost you an arm and a leg to produce your movie rather than hiring Steven Spielberg to do it? Sure sure, you gotta spend money to make it and the video is an advertisement for the artist but either cut the cost or stop crying about how expensive it is.
Another thing I noticed in analyzing this piece written by Ms. Love. Her numbers don't add up. Take a look:I would say that the entire article is suspect, since it's clear that Ms. Love can't even do simple arithmetic. I'm sure that she feels slighted because she isn't getting 100% of the millions her albums make, but the fact is that she is living the rock star lifestyle and she has a lot more money and other advantages that most people don't enjoy. Sure, I agree that artists should get a decent cut of the profits from their music but I really hate to hear them cry about how they just aren't getting that extra million or two past the millions they have gotten. They should try working minimum wage scrubbing floors for a while and we'll see how much they cry about being a celebrity.
Re:I'd be pissed (Score:4, Insightful)
Saying this kind of thing just shows that you "don't get it". Ok, so the record company says, you need to hire MR Bigshot for $10 mil for 5 minutes of video... you have no choice it's in your contract...
Or, ok, mr smart guy, you were smart enough to have some artistic control added into your contract, well, WE always have to aprove your albums before they are officially sanctioned to go on sale, so we just don't approve. Sorry. All your money spent on no name directort is wasted now.
Oh, and since you signed a contract that says you MUST publish 5 albums and 8 videos before you get out of the contract, you are stuck with us until you put out an album that we "approve" of. You can't legally work another day of your life in this business with our say so... You can't really even sing in the shower, we own your voice forever, bitch. And if you piss us off enough with your fancy college student directors, maybe we'll just NEVER approve any more of your albums... Of course, w'll make sure, before we do, you'll be on our "solo" contract so even if you try to form anothe rband you cant.
So, in conclusion, ha-ha, fuck you. Sincerely, The recording company.
Re:I'd be pissed (Score:5, Funny)
If you're a rapper and you're reading slashdot at 11:30PM on a Saturday, chances are you don't have to worry about making it big.
Mesaly? (Score:4, Insightful)
I know a lot of people here are going to be mad that the record company is getting anything, but I also dont see a problem with that as long as it is the record company that's doing the work of recording, advertising, listing with iTunes, etc. It's what record companies are for, after all.
Re:Mesaly? (Score:4, Informative)
Re:employees getting "fucked over" (Score:4, Insightful)
Is $9.99 a good deal from iTunes Music Store? (Score:4, Insightful)
Buying the album from iTunes gives you the ability to listen t the product immediately. Buying it from a music store requires a separate trip to the music store. Buying it from a mailorder or online retailer requires you to wait for delivery.
When you buy an album from iTunes, you get it in a lossy compression format. With a CD, you get the music with a sample rate of 44.1 kHz @ 16 bit.
When you buy an album with iTunes, you may get a small jpeg of the album cover as an ID3 tag. When you buy a CD, you get an actual physical copy of the image on glossy paper, and usually some interesting material in the liner notes.
When you buy an album from iTunes, it is protected with its DRM technology. You are also tying yourself to playing the songs from iTunes, and are trusting that Apple will continue to develop iTunes and maintain their DRM infrastructure. When you buy a CD from a record store, you get a product with no DRM protection, is able to be played a many output devices of many styles, and has a long enough history to assume that new devices will be produced for a long time to come.
An album bought from iTunes can be burned to CD. A CD bought from a store can be ripped to MP3. Mostly a wash, but burning the slightly lower fidelity iTunes AAC file to CD doesn't give it the quality of the CD. Ripping the CD to MP3 reduces the quality, but you still have the high quality original.
When you buy an album from iTunes, you get a very helpful shopping experience. Searching for songs is faster, there are hypertextual jumps between song, artist, and album. On a particular page, it will show you top selling songs by that artist, and the "people who bought this song also bought..." list. Also, if you use the shopping cart, rather than the 1-click purchase, you get a "Recomendations based on albums in your cart." When you buy an album from a record store, you tend to some teenager who sparked up during his last break asking you "Can I help you find anything?" (to which my response is usually. "You still have them arranged alphabetically by artist, right? I think I'm all set.")
Different people will put different weightings on each of these criteria. If you usually listen to music from only one or two Macintoshes, or an iPod, rarely use actual CDs, have audio equipment that doesn't give noticable differences between CD and MP3 quality, then iTunes is a good deal. If you frequently are on non-Macintosh machines, bounce around on more than three Macs when you listen to music (or for some other reason find the need to "authorize" a Mac with your DRM key prohibitive) and have a quality home entertainment system that can show the differences between a lossy rip and the original CD, then a close to 50% price reduction may not quite be enough for you.
And thats exactly how it should be (Score:3, Insightful)
(of course, I leave it as an exercise for the reader to determine the share of the revenue from each song you pirate on Kazaa that goes to the artist)
Top Artists Balking At A La Carte Downloads (Score:5, Interesting)
Despite the major labels' success in clearing hundreds of thousands of tracks for purchase online through services like Apple's iTunes Music Store, some top artists continue to resist authorizing the dismantling of their albums for Internet consumption as a la carte singles. Some acts are requiring that their music be sold exclusively in album bundles. For example, Linkin Park recently pulled its music as a singles offering from digital services. Sources say the band has expressed concerns about undercutting album sales. Other acts with similar stipulations about their work include Radiohead, Madonna, Jewel and Green Day, sources say.
Now, from an artistic standpoint I can see where they are coming from, there are certainly albums that must be experienced as a whole, or at least in the order that they were laid down. Still, I have to wonder whether they're not just shooting themselves in the foot; if the concern is over money lost to piracy, wouldn't 12 cents in the hand be worth it to an artist rather than 0? Eventually, they'll make the money back on volume; it seems they're too obsessed with immediate returns.
Business 2.0 (Score:5, Funny)
Measly? For some, excellent for most (Score:5, Insightful)
Secondly, these are growing pains. 12% is excellent for a non-MTV/Clearchannel down your throat 24/7 mega-pop band. As diversity in the catalog continues and less money is funneled into four or five pop sensations, but instead funneled into exposing more artists then smaller advertising and word of mouth will produce more varied sales. Bands that start as nobodies and end as nobodies will be getting 12%. That's pretty good.
Personally, I think moving to singles and a diverse selection is a step in the proper direction to satisfy both fans and artists. We're going to look back to the days of big radio and MTV and not believe our rampant fandom and misplaced loyalties, not to mention taste.
Much better than albums (Score:2)
You see, after the recoupable costs (which are mighty, and include a "packaging deduction" which is around 15 to 20% of the royalties), then a good portion (half, according to some sources) of what's left is held as "reserve" to account for returned merchendise, etc! The "reserve" is (allegedly) paid back over 2 to 4 years, minus the expenses of returned CDs an
Seems about right (Score:3, Informative)
Anyway, 12 cents a song for a 12 track cd = $1.44.
I believe most artists make anywhere from $.75 to $1.50 per cd depending on the popularity of the artist. Yep you read that right.
Infact they get a bigger share because the RIAA does not have to go through a greedy retailer which charges $5-7 per cd, and no shipping or manufactoring costs are considered. Its the retailers and not the RIAA who make the majority of the outrageous prices. If the RIAA sells a cd for $11.99, the retailer will bump up the price to $18.99 and pocket the difference. Infact I believe they already do this. They only discount if the product does not sell well.
That is unless the artist is really big and has their own record label after their contract expires. That is difficult because most contracts require that the RIAA own the first 5-6 cd's. Mostly the big artists can afford to outsource to a small or indie label after many hits when the contract runs out. Metallica for example does have such a deal which explains why they sued Napster. They have alot more vested interest and their newer albums make a shitload more money for them. They do not have to have a huge record label to market for them.
Re:Seems about right (Score:3, Informative)
Metallica are distributed by Elektra in North America (and a few Polygram (which is Vivendi, IIRC) imprints in Europe and Sony in Japan). However, Metallica are effectively indies distributed by a major label now.
Metallica is legally E/M Ventures, which is a corporation set up about ten years ago to own and manage all Metallica intellectual property, as well as manage the band's affairs. It's share breakdown is basically, IIRC:
What is the label doing? (Score:3, Insightful)
Or now that all the radio stations and TV stations are owned by the same companies that own record labels, is it hard/impossible for an artist to get a decent deal on advertising without the media conglomerate's support?
Consumers should decide! (Score:5, Funny)
actually it's surprising (Score:4, Insightful)
the music "industry" has lost far more due to artisits being able to produce their own albums and generate their own music. technology has hurt the music industry. iut has freed the artist to bypass the studios and go stright to the people. all the music industry has to do is look at the crap they are pushing and see they are dealing with a more discerning clientele. how many teeny-bopper, perky breasted teenagers and tatooed, skinny, psuedo-punk wannabee bands do they think we're gonna buy?
Re:actually it's surprising (Score:4, Interesting)
I agree that file trading increases exposure, and would not be surprised to discover that a great number of people who enjoy it actually increase their purchases of CDs (a net good for the industry). However, the music isn't there by the will of the artist and/or copyright holder. Silence doesn't always indicate acquiescence, and again if an artist is just scraping by they're probably not in a position to take risks on the goodwill of the file trading community.
There are artists that willingly allow taping/trading of concerts, and places online to download their stuff (with BitTorrent even). Why not give them a listen?
Sounds Like A Great Deal To Me (Score:4, Insightful)
Why don't you show us...
...how Linux distros divvy up their dollars, and what percentage the programmers get.
...how work-for-hire proprietary software houses divvy up the dollars, and what percentage their programmers get.
It's gotta be far less than a penny on the dollar for Linux, and I'd be surprised if it was more than a nickel on the dollar for all but the smallest proprietary software houses (where the coders are probably the owners anyway).
So, if artists can make 12% of the gross online, that's sweet compared to a lot of other situations.
not the same thing.... (Score:3, Interesting)
As far as the rest of your comparison, most commercial software is produced by large teams of people, built up from libraries written by even more people, etc. Music is produced by the singer and/or band and a producer. Yeah, there are sound engineers and what not, but I'd argue that the band and maybe the producer are the
Great, assume this model works (Score:3, Interesting)
Re:Great, assume this model works (Score:4, Interesting)
Until last week. The first such terminal was enabled last week in the city of Lübeck, Germany, which is incidentally pretty close to where I live.
Kristian
is 12% really that low? (Score:3, Insightful)
Granted, the record labels do not have the recurring expense of having to continually refill stock, while my store does, but nevertheless; Record Labels are small fish in the big pond of economics. Sure, they may be making out like bandits as far as this is concerned, but in the grand scheme of things, not many people invest in record labels today, because they just don't make as much money as other industries do.
Royalties: Comparison to Publishing (Score:3, Insightful)
While it is true that recording (and other artists) get screwed by media companies in many ways, the 12% discussed is not at all out of line with current reality in other fields.
Re:Royalties -- You Are Close (Score:4, Informative)
SLRP: suggested retail list price minus 20% for packaging. ex: CD retails at $14.99, minus 20% for the packaging ($3.00), SLRP is $11.99.
New artists signing with an independent label get between 9% to 13% of the SLRP.
New artists signing with a major label get 12% to 14% of the SLRP
Midlevel artists get 15% to 16% of the SLRP
Superstars get 18% to 20%+ of the SLRP.
Re:Royalties: Comparison to Publishing (Score:3, Insightful)
This is *several* times better... (Score:5, Interesting)
...than current arrangements.
What does an artist get from an album? 50 cents, tops. That's for approximately one hour of content which wholesales for about $10.00 and retails for anything from $10 to $18.
Here, the artist gets paid $0.12 for approximately 4 minutes of content which wholesales for $0.60 and retails for $1.00.
If an artist sells an hour of content online, he gets $1.80, which is 3.6 times what he gets from the CD. Looking at it from wholesale to wholesale, if content with a total wholesale value of $10.00 is sold, the artist gets $2.00, which is 4 times what he was getting previously. If you go for $18.00 at retail, the artist is now getting $2.16. This is about 4 times better than what the artists were getting before.
Who cares???? (Score:3, Interesting)
I can't quote it (Score:3, Interesting)
another slice of info that was rejected by
I received an email from bloodshot records with the following- 'As the music business heads off into uncharted territory we are feeling the effects first hand as stores close, media consolidates and users have no qualms about stealing music from the web. After a fun business trip to Apple HQ in California, we have decided to cast our lot with Appleâ(TM)s new iTunes store. By the end of the summer (hopefully) youâ(TM)ll be able to download individual tracks or albums from nearly every Bloodshot artist (including comps). Weâ(TM)ll let you know when our catalog is ready to go.'
12.5% is what a book author gets too .. (Score:4, Interesting)
The whole bit of authoring books, particularly technical ones, is such a gamble for everybody concerned that authors churn them out as quick as humanly possible these days and doesn't it show.
It's just not worth spending the time to do it properly.
changing the distribution channel changes nothing (Score:3, Interesting)
Re:The $0.99 thing... (Score:2)
Re:hello and welcome to last week. (Score:2)