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How Labels And Artists Divvy Up Your Dollar Online
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."
According to this guy, artists only get 10%-12% of the cost of the CD.
And thats after paying for promotion. Depressing stuff.
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, it's a big step up."Only two things are infinite, the universe and human stupidity, and I'm not sure about the former."
If it's anything like regular CD sales;
.40, .30 and
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.
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That figure excludes deductions made by the record label for everything imaginable. Studios charge artists a fortune in promotional costs and touring, limos and so on. But even at 12c per track, that's a much better per track rate than artists have gotten traditionally from prepackaged albums.
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...
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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.
"In spite of everything, I still believe that people are really good at heart." - Anne Frank
If you find yourself in such a situation, get 1-800-MC-ASSIST on the phone while you are arguing with the store (that's for mastercard, visa has a similar number, I just don't remember it off-hand). The store's merchant contract has a number of consumer-friendly requirements of the merchant. In this case, they are not allowed to set minimum purchase requirements to use a credit card. You should be able to buy a 1 cent gumball with your CC if you wanted to.
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.
When information is power, privacy is freedom.
In the book "All You Need To Know About The Music Business" by Donald s. Passman, an attorney in the music industry, royalties are extensively discussed.
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.
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) and here (pt 2).