PressPlay and MusicNet vs. Artists

gilroy writes: "According to a New York Times article (free registration, yadda yadda), despite taking the moral high ground (that they want to see artists compensated, as opposed to all those evil downloaders), the record companies have actually set up pay schedules so as to -- wait for it -- rip off the artists who record the music. Some figure they will earn less than $0.0023 per download -- yes, that's hundredths of a penny. Best quote from the article: 'For many acts, suddenly there appears to be little difference between the illicit file-sharing system and record-label services.' Good to see they're fighting for the artists, n'est-ce pas?"

Comments

This is actually good...

[Sixyphe]

The greedier the industry gets, the better it is for the artists and the public in general, simply because it will eventually reach the point where everybody (and, hopefully, Metallica too) will just want to bypass them. The nice thing is, we now have the means to do so. It's much easier to convince a judge that a publisher does not deserve protection if it's obviously ripping everybody off.

Re:This is actually good...

[Znork]

Guess who pays for it today? The artist.

The recording industry forwards an advance to the artist, which is then used for recording and marketing costs, and the artist gets to live on whatever is left (a helluva lot less than what you make on most computer industry jobs). This money is then recouped out of the artists share of the profits (the few cents they get from the record, or in this case out of the 0.00fraction cent they get per download). When an albums sells about half a million records, the artist will begin getting any money at all. Needless to say, artists getting paid doesnt happen very often.

End result for most artists: An interesting adventure in getting screwed that makes them less money than a job asking if people want fries with that.

With the costs for recording and marketing getting much lower with cheaper technology and the net, it's likely that the artists would make very much more money by going independent. You dont have to be independently wealthy anymore.

It's a sad thing..

[Marx_Mrvelous]

It seems the only way that we'll break out of the cycle of recording companies ripping off artists are to bancrupt them. And that means hard times for recording artists while a new economy is built to support them.
I do think that file sharing is a good thing, but it is also destructive to the current economic structure of the music industry. But, with change comes pain.

Re:It's a sad thing..

[night_flyer]

I do think that file sharing is a good thing, but it is also destructive to the current economic structure of the music industry.

It needs to be destroyed, with a LARGE number of people on the net, there is NO reason a new promotional system cant be set up. I hardly listen to the radio anymore, but I do check out new music on the net...

Someone has to

[SilentChris]

"Good to see they're fighting for the artists, n'est-ce pas?"

I'm glad someone is. Though I agree with the idea that record companies aren't the elite "doers of good" in the industry, the fact remains that many geeks (myself included) have basically been fucking over the artists by downloading free music. Admit it. The first time you saw someone download something from Napster/GNUtella/whatever, you had a pang in your gut that said "Isn't there something wrong with this?" It's called guilt.

There are hundreds of record labels that get screwed over by these practices - there are millions of artists who get the same. Unfortunately, without a massive revamping of the entire industry, you can't fuck one and not the other.

Re:Someone has to

[SilentChris]

I'd consider you more the minority than the majority. Most prior Napster users were teenagers who simply didn't want to shell out a few bucks to get the latest Britney album. Most aren't adults, and most certainly DO NOT share your view of expanding one's musical horizon.

It's almost answer a realistic problem with a philosophic argument. It looks nice on paper, but real life dictates otherwise.

Re:Someone has to

[ToLu the Happy Furby]

Most prior Napster users were teenagers who simply didn't want to shell out a few bucks to get the latest Britney album. Most aren't adults, and most certainly DO NOT share your view of expanding one's musical horizon.

There were upwards of 60 million Napster users when it got shut down. "Most" of them were not anything. ("Most" of them were certainly not teenagers; there are only ~12 million teenagers in the US total!) And, as there were something like 40 million unique mp3s floating around Napster, I guess "most" of them actually were listening to more than just the latest Britney album. (Otherwise that's a pretty long album...)

If you want a "most", here it is: most Americans with Internet access in early 2001 used Napster. The overwhelming majority of those who could feasibly use it (i.e. those with broadband connections) used Napster. And while I can't speak for all or even "most" of them, I know I have never, not once, felt guilty for downloading music from the Internet, nor has anyone I've spoken to about the subject.

And, like the original poster, I most certainly increased my CD buying as a direct result of Napster. I can't say whether such behavior reflected the majority or minority of Napster users, but considering the almost precise correspondence between growing (then suddenly falling in spring 2001) online music trading and growing (then suddenly falling in spring 2001) record sales, the statistics strongly support the former.

Laws are supposed to arise from the consent of the governed. When most of the governed are engaging in an activity with a clear conscience, it probably shouldn't be illegal, unless it carries some hidden negative consequences unseen by the uneducated majority. In the case of Napster, though, there were two hugely positive consequences: free access to the largest cultural repository the world had ever seen, and increasing CD sales to boot.

The argument that we should suddenly rewrite and reinterpret the past 200 years of copyright law (in which noncommercial infringement was generally held to be inactionable) just to kowtow to what the misguided oligopoly trying to retain their control over mass expression and culture mistakenly feels is their own self-interest is utterly absurd. The fact that you feel "guilty" about it (and project that guilt onto 60 million others) is just pathetic.

We need more of this

[boa13]

Recording companies offer the artists a service they often like: "Don't bother with the business, we've got all the skilled marketroids to ensure your genius will reach the masses. Just keep doing you art". This comes for a price, of course. But truth is, managing your own musical business while doing art is a real pain. I hope such incidents will entice more and more artists to try alternative ways of ditribution and earnings.

Giving away the music and being paid through Paypal seems a bit overoptimistic, giving away the music, or making it very cheap, and being paid through concerts is something some bands are actually doing, trusting small companies that essentially work through the web is something I'd like too see develop in the future.

MPAA has a monopoly they don't want to lose. It's not only against MP3-sharing they are fighting, but also against any possible alternative to the way they make business. Because they can't afford to stop to grow.

Submitted this yesterday

[Krelnik]

Yeah, I know, its pointless to post this, but I guess I like tilting at windmills.

I submitted this yesterday and it was rejected:
2002-02-18 15:32:33 Record Companies Facing Revolt of Artists (articles,music) (rejected)

I've read all the FAQ's on submitting (several times) and try as I might I cannot get a story accepted on this site. It makes one wonder what other stuff gets overlooked in the submission queue.

More to the point, it makes me wonder what issues are important to the editors of this site but which are not being clearly articulated in the FAQ's on submitting. I.e. I must be doing something wrong, but for the life of me I can't figure out what.

Not according to the article

[mblase]

Although Pressplay and MusicNet license the music, the bands are not paid a licensing fee. Instead, the labels pay their artists a standard royalty for each song accessed by a fan, as they would for a CD sold. This means that the artist gets on average less than 15 percent instead of 50 percent. But, out of that, 35 to 45 percent is deducted for standard CD expenses like packaging and promotional copies -- expenses that obviously don't exist in the online world.

And:

To try to avoid future protests, most major labels have added a clause to their standard recording contracts allowing the label to sell an act's songs on the Internet, including all subscription and pay-per-use services. It is very difficult, said Mr. Stiffelman, for a new band to have enough leverage to remove this clause from its contract.

In other words, the bands' lawyers are arguing that the music label contracts give a royalty for each copy of the song sold, and a license payment for each instance of the song used but not sold. Future contracts will probably alter this, but the bands feel they deserve a higher license fee instead of a tiny royalty -- which is cut further by CD packaging expenses which the online world doesn't have.

Bands do not "sign away" all the rights to their songs when they record with a label. They retain the right to a cut of the profits. The argument here is that the cut they're getting is unfairly and possibly illegally small.

Artists need to reduce

[asv108]

Their dependence on record companies. There was a time when bands needed to a hit record in order to hit the "big time" but that day has long since passed. Serious musicians can always embrace live touring as a way to build word of mouth. Look a band like Phish who built a huge cult following by live touring before they even signed a contract with a record company. Having touring revenue can give a band the ability to negotiate favorable terms since they are not completely dependent on record sales.

Besides touring, you can use alternate methods of distribution such as: net downloads or you can even cut your own CD's and sell them through an online store. Basically, there is no reason for artists to be so dependent on record sales.

Re:Someone has to objectively verify . . .

[raresilk]

Every time music IP rights come up in discussion, I notice that most of the posts fall into two categories:

(1) those who admit they download or rip music, but claim they either own all the CDs they rip, and/or that they buy more CDs, or more diverse CDs, as a result of downloading; and

(2) those who claim they never download or rip music, but insist that those who do are simply opportunistic freeloading teens downloading or copying Britney/N'Sync, and deny that category (1) exists.

What is striking about this duality is that the people who actually do rip/download would seem to be in a better position to report why they are doing it, as compared to those who have never opened a Gnutella window or ripped a CD. Personally, my girlfriend and I exemplify both classes of category (1) very clearly - she rips our CDs so she can make us mix CDs for the car/gym; I try out mp3s of new music, and buy the CD if I like it; we both rip some CDs so that we can play the tracks on our computers with visual displays such as I Tunes and Winamp plugins. And we would jump at the chance to convert our large (approx. 3000 CD and 500 LP) music collection to a high fidelity, all digital format that could be databased, searched, and easily played on our audio gear as well as the computer. Ironically, although such capability would enable us to buy even more CDs than we already do (we are running out of CD room in the house - seriously), the music industry seems determined to ensure that this never can happen.

Isn't there some way to obtain empirical data to determine whether (1) or (2) is the most valid world view? For example, could a program be devised to crawl out over Gnutella and track and compile download frequency data of file names, to see whether most downloading is focused on the big money pop groups as the industry claims? If that's too scary, could some university department with expertise in such things conduct a reliable blinded survey, or arrange a study of this behavior? When the two sides of the debate have such different perceptions about what is actually occuring, it's difficult to see how progress can ever be made.

And if I'm right (as I suspect) that category (1) users actually predominate, and that many category (1) users are actually serious music buffs like us (and are the industry's best customers, I would think), it is possible that the RIAA and its government backers would be given pause. I mean, I was a teenager once, and how much music could I afford to buy then? None. I admit that in those days I shoplifted a few 45s and LPs I desperately wanted and couldn't hear on the radio, and even though I would gladly have paid if I'd had the money, it still wasn't right. But I have paid that back with thousands of legitimate purchases as an adult. One would think that the music distributors would look at downloading the same way - it is the soil in which their best future customers grow. I find it hard to believe that teens who get their jollies downloading Britney (or other such slop) and copying it for their school clique are ever destined to become music nuts such as myself. The industry would be better worrying less about squeezing the last penny out of Britney drones who will probably never buy a single piece of music after they leave college, and worrying more about how much money they'll lose when people who purchase hundreds of CDs every year swear off Universal and other labels that cripple our music. My girlfriend and I have already done so.

Re:This is actually good (You're Wrong)

[anonicon]

Well, where do I start?

Well, it's not called "ripping people off," it's called investing. Record companies put up a huge amount of capital to produce records, market bands, and finance tours. Because there's a great deal of risk involved in promoting musicians, the recording industry demands a very high rate of return. Yes, the musicians create the content, but without financial backing, you never would have heard of Metallica.
Investing my ass, if anyone but the record labels did what they do, they'd be hauled into court for loansharking and racketeering. Oh wait, that's already happened to them...

Per the high risk of modern music and need for a high return, you're right. In fact, just like small businesses, they're quite risky. Guess what? If I get a loan for my small business, I make 100% of the money that customers pay me, and then I repay 100% of my loan from my proceeds. If I'm a signed musician, I get 7% of the money that customers pay for me, and then I repay 100% of my record company loans from my proceeds. Do you see a problem with this equation??

Band contracts last for a set number of years, and during that time, the record company will spend a gratuitous amount of capital promoting them.
WRONG. Contracts last for a set number of *albums* - there is absolutely no year limit. Also, the record company will *not* necessarily spend a given amount of capital promoting the artist - they will typically have X$$ to promote 10 groups out of the 20-30 they signed that year. The others will be cut at the end of the year.

Once that contract expires, the band typically retains the band name, for which a tremendous amount of branding work has been done.
If you're one of the 10 out of 30, some branding work has been done. Also, most contracts don't expire, the artist is flat out dumped from the contract. For those contracts that do expire, sure the band retains their band name, but they have no rights to their music or lyrics - the label owns those for at least 35 years at the minimum unless they auction them off to the highest bidder - who then keeps the copyright on the artists' material for the life of the auuthor plus 95 years.

They can take their brand and cash in on it themselves.
Riiiiight, you're talking about less than 2% of all acts signed to the major labels by this point. By the way, if they play their songs in concert, they have to pay the label for the rights to play their songs - because the songs don't belong to them. They belong to the label. If they create a Greatest Hits album, 90-93% of that money goes to the label. That's cashing in, right?

The end result is that bands that have longevity
You're on a roll now. Through la-la land.

will eventually get to live a fairy-tale existence, riding off into the sunset with millions and millions tucked away into their mutual funds.
You mean Waylon Jennings? Merle Haggard? TLC? Guess what, between all of them, they have never received a royalty check despite selling tens of millions of records and CDs.

Let me just say that, while I sympathize with people like Courtney Love, I won't shed a tear if she ends up with $15 million in the bank instead of $35 million. She can probably have her chauffer start clipping coupons out of the Sunday paper to help her make ends meet.
Are you a record company shrill? You speak like one. Courtney Love and Hole are not mega sellers, and likely will make less than $1 million net for their careers, divided by 4 members *and* 8-10 years. That comes out to $25,000-$31,000 per year per member before taxes - if they're lucky. 99% of all artists signed to the labels will not see a royalty check - coupons will be a necessity for them.

Personally, I'm looking forward to the internet and technology advances equalizing the revenues of the entertainment industry, as high-quality audio and video content becomes ridiculously cheap to create and distribute.
In theory, technology and the internet should force prices down, but many of us know they won't. It will be ridiculously cheap for the LABELS to create and distribute, but those savings will not see their way to either the artist or the consumer. Those ever-cheapening prices *will* help the independent artist who avoids the labels like a plague, thank God.

What a troll.