Slashdot Mirror
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."
divvied up with the writer?
photosMy Photostream
That doesn't add up to a dollar. But the musician and his recording company are still getting more than anyone else. It's just the recording company is screwing the musician. ... On the other hand, when independants start being sold through the Apple Store, it looks like those musicians will be getting their full 42 cents.
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.
Is 12% really that measly? I agree it's low (unless the artist is a britney spears/in sync clone, in which case it's too high), but what percent does an artist get from CD's? What percent is standard for authors? My mom is an author, and gets about 25 cents from a 5.99 paperback... Seems like online music is giving artists a bigger cut compared to more traditional methods.
It's nothing but crumpled porno and Ayn Rand.
100% of 0 is 0. And everyone gets a hundred percent of the total, including me. Math is fun.
(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.)
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.
ok...normal disclaimers apply here...I don't like stereotypes anymore than the next guy...but hey, they're a fact of life. You can, statistically, boil down a socio economic group to fit certain "patterns" and "trends"...like I said, not good, but usually true...so that's my disclaimer done...now onto my point
I have heard a lot of people talking about how RIAA will shoot themselves in the foot because the economies are changing...ie, people will just not pay $20 for something they can download for $2 (taking into account time costs etc)...and I'm thinking to myself...ok...so what really will happen
Ponder the following...and flame me if you think I'm off my rocker
1) To download songs...you need internet access, possibly an mp3 player to play them back...relatively technological savy...and the willingness to spend the time on the computer to get them...this to me, says middle to high socio economic (see above disclaimer before flaming)
2) Combine this with the fact that lower socio economic groups tend to spend more on entertainment (can't back up with specific figures right now...but I think it's a fair statement, and will be backed up by most retailers)
3) Labels will spend more money promoting artists and genres that give them the greatest returns...that's just common business sense
4)If your album doesn't get promoted by a label, at the moment anyway, you don't make it big as an artist...and your music dissapears apart from a few that 'discovered' you, and play you to their friends at parties
5)If I asked someone at a record company...I'm sure they could tell me exactly what kind of music each different socio economic category listens to (statistically speaking), and indeed, could probably break it down further to gender, race etc...I would also go further, and say that these different categories would have very dissimilar tastes in music....so, here's my thoughts (I'm sure a lot of you can already see where this is going)...
We download music...statistically, all within a few different genres....those genres stop being profitable...those genres stop getting promoted...those genres dissapear and get replaced with different kind of music...that appeals to groups that buy cds.....we bitch about how there's no good music anymore.
so...a question...through free market forces, and economics...are we really just shooting ourselves in the foot (over the long term), by downloading music we like???
(Humorous side note...maybe we should all go download some rap music today...consider it a national service)
A box of wheeties with a picture of Tiger Woods on the box: Tiger gets a dime, the farmers get a nickel.
Fortunately, touring is the time that bands make their wads of cash. Bands earn their well-deserved buck, and the real fans get to see what the music is really about.
Unfortunately, unless you are the Rolling Stones or Phish (or the like), bands don't break even on touring.
...how long before we start seeing cd burning terminals at music stores where you can either buy full licensed albums, or pick and choose tracks ala cart? I imagine that such a service could be provided at similar cost to itunes and still make a buck or two.
There is no sanctuary. There is no sanctuary. SHUT UP! There is no shut up. There is no shut up.
Man, a lot of you geeks dont know a damn thing about the music biz. I have friends in a major band (I built their boxes), and after having their own accountants do the math on their 'great new deal', gave back a multi million doller advance from their label. They were going to make nothing at all off the deal if they went less then double platinum, and be stuck with the label for several more albums... this required a bunch of lawyers and yet more money, just to give the cash back....
If you don't mind paying pimps thats your biz, but don't pretend they aren't exploting the bands.
Ibn
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?
Try not. Do or do not, there is no try.
-- Dr. Spock, stardate 2822-3.
IF the album goes gold, and they got to pay for the promotion and music videos... and those videos doesn't come cheap...
... zero!
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
Courtney Love Does the Math
...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.
I really don't get it. You guys always bitch about how the artists are getting ripped off, after all, it's there work that makes the record companies the cash, but no one seems to fight for your own wages. You do all the work at your company, be it programming, hardware design or anything else. YOU do it, and someone else is making millions, but fair is fair right? Same should go for the music industry!
It woud be good to take advantage of it now, the recently settled anti-trust case should allow retailers to put a stop to this practice. They might not do it quickly, look for them to stop processing those Visa Check Cards as Visa transactions, and make you put in a pin number. Oddly enough even though almost the exact same transaction occurs, it costs the retailer 2-3 times as much in fees if you sign vs enter a pin number. Personally I enjoy sticking walmart with the fees on my soda pop from American Express, and then paying the bill of each month. I'll bet both of them want to seem my account closed.
but I've heard that apple charges 34 cent per song and their agreement leaves the rest of the division and responsibility up to the label.
/.'s editors:
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.'
Creationists are a lot like zombies. Slow, but powerful and numerous. And they all want to eat our brains.
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.
"The government of the United States is not, in any sense, founded on the Christian religion."
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.
And that's why it's almost impossible to buy a decent book these days, unless the author happens to be a J.K. Rowling or such.
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.
What is preventing some rock band (or whatever) from selling their own songs off of their own website? That is, just go direct to the audience and they'll receive most of the profits.
Unless they're employed by RedHat or IBM or similar, linux coders aren't expected to be paid. The software is also free, so I don't think anyone is too upset missing out on 12% of $0.
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 main "artists" of the music. The point being that it takes a lot fewer people to create commercial music than it does to create (most) commercial software. Obviously for software there are exceptions to this, and many of these programmers have become wildly successfull.
AccountKiller
Steve Albini's much more thorough and interesting rant (from 1998), The Problem with Music
Courtney Love was sticking up for artists rather loudly during her lawsuit with Vivendi Universal, but shut up quickly after receiving a nice, fat settlement.
I wish I could say it surprised me.
12 cents per track, eh? Does Itunes actually pay bands?
One of my bands has songs up on mp3.
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 had to pay them to get them to answer your question. I'm not going to pay mp3 money to ask them how much money they owe us. I just want to know why it's changed.
riding round the world on an old motorcycle
As I've said for years - changing the distribution channel changes nothing for the artists. The system is rigged to not pay the artists.
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
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.
Knowledge is power. Knowledge shared is power multiplied.
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 would hold up in court, and the record companies know this.
The handful that engage in such unscrupulous actions do so under the assumption that the majority of people who they tak to aren't smart enough to realize that such a letter of intent isn't worth the price of the napkin it's written on, and are so desperate to sign with someone that they'll take a bad deal just to get signed.
Quite frankly, it's just social darwinismâ"the more intelligent preying upon the unbelievably stupid. The band could simply ignore the letter of intent, since it isn't binding because material terms were not agreed upon prior to its signing. The record company knows they'd be laughed out of court, so if they threatened to sue the band, the problems could be solved by hiring a lawyer to send the record company a simple cease & desist letter.
And before you say, "Oh, but it -is- legally binding", go look up the law yourself.
120 character sigs suck. Make it 250.