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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."

107 of 513 comments (clear)

  1. it should be 50/50 by ender_wiggins · · Score: 5, Insightful

    I would rather give the artist 50% and the site 50%. leave B&M sales to fund the other leaches.

    1. Re:it should be 50/50 by zcat_NZ · · Score: 4, Informative

      If it's anything like regular CD sales;

      the site takes .40,
      the labels take .30 and
      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.

      --
      455fe10422ca29c4933f95052b792ab2
  2. I've always thought... by bazabba · · Score: 5, Insightful

    that the artists should be attacking their own labels...not their fans.

    1. Re:I've always thought... by ChazeFroy · · Score: 2, Interesting

      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.

    2. Re:I've always thought... by wavedeform · · Score: 2
      At the top of the food chain, tours can be lucrative. But for almost every working band, the money from touring, combined with a day job, still makes a pretty meager living.

      Bottom line: Don't become a musician for money.

    3. Re:I've always thought... by poptones · · Score: 3, Insightful
      Uh... where are you people getting this?

      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.

    4. Re:I've always thought... by T40+Dude · · Score: 3, Funny

      Lars ? Is it you ?

    5. Re:I've always thought... by GnarlyNome · · Score: 2, Funny

      Espc. if you play Banjo

      --
      Diplomacy is the art of saying "Nice doggie" until you can find a rock. Will Rogers
  3. Thats way less then the artists get from Kazaa. by Kenja · · Score: 5, Funny

    This is why I only use Kazaa to get my music. That way I know the artist is getting 100% of the 0.00$ I spend.

    --

    "Have you ever thought about just turning off the TV, sitting down with your kids, and hitting them?"
    1. Re:Thats way less then the artists get from Kazaa. by squidinkcalligraphy · · Score: 2, Funny

      It's a win-win situation: Artist gets 100%, Record company gets 100% (of your $0.00).

      --
      "I think it would be a good idea" Gandhi, on Western Civilisation
  4. "measly"? by RLiegh · · Score: 5, Insightful

    They're getting just under half of what the labels are getting.

    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].

    1. Re:"measly"? by DavidinAla · · Score: 4, Insightful

      Considering the costs of promoting a new group, getting them recorded, producing the CDs and getting distribution, the group almost certainly wouldn't be selling ANY albums or getting ANY money if they weren't working with a record label -- because nobody would have heard of them and no CDs would exist. While labels might have too much power and take too large a cut of the revenue, the truth is that they DO fill several very important functions, which some people don't seem to understand.

    2. Re:"measly"? by leviramsey · · Score: 3, 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?

    3. Re:"measly"? by circusnews · · Score: 2, Insightful
      The promotion and financing functions of the record industry will probably always be necessary


      Yes, but do they have to be as intertwined as they are?

      As I see it, if the record companies were forced to split the financing off from the rest of what they do (promotion, recording, etc) the artists and the public would end up with a much better deal.

      Think about it for a minute. The financial side would have much closer public scruteny as a financial company, and would fall under much tighter federal regulation. Record companies would then face the prospect of having to have its books looked at under more normal accounting. The record industry would no longer be able to claim the loss on the loosers (the financial company would), and would have to bill for the services it provides under normal accounting rules. Food for thought.

    4. Re:"measly"? by Shadow99_1 · · Score: 2, Insightful

      Well I'm not sure if anyone will ever read this (since I'm coming in a few hours after it was first posted), but I used to be a big fan of MP3.com... You know before they were sued & had to sell their soul to the big 5 music labels...

      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 the msot recent artists in all categories, but the blues main page lists all the recent blues artists signing up). Beyond that they had reviewers who had there own section of the site & would spotlight artists, which often included contests voted on by the site goers. I picked up more than a few new bands by coming back each week for the 'female artist of the week' page.

      This is a constructive promotional tool that did wonders for alot of artists that would not have been exposed otherwise... It was a model that worked wonders. Sure not every artist made it, but tons of them did... Heck several made steady income from CD sales only doing this, that's pretty unheard of in the music industry...

      All in all I'm just saying that no the promotional end doesn't ahve to be handled in the way RIAA members currently do it, It can come from grass roots efforts to promote artists... In fact that makes far more sense then letting the 'evil empires' do it while screwing the artists out of every cent they can...

      --
      we are all invisible unless we choose otherwise
  5. Interesting math... by cyb0rg · · Score: 2, Insightful

    40+30+12 ?= $1

    1. Re:Interesting math... by bazabba · · Score: 2, Informative

      Key figures: Read the article for the other figures. It shows how its divided up 5 ways.

    2. Re:Interesting math... by Feztaa · · Score: 4, Funny

      CowboyNeal gets the other 18 cents.

    3. Re:Interesting math... by deadsaijinx* · · Score: 3, Funny

      well, using crazy RIAA math, you must subtract the negative dollars they never earned due to piracy. so, the equation is 40+30+12--18=$1

      --
      YOU SUCK BALLS!
    4. Re:Interesting math... by iate138 · · Score: 2, Funny

      ha. hahahahaha...not only am i too late, i did the math wrong too... *slams head into desk*

  6. how is it by alfredo · · Score: 2, Interesting

    divvied up with the writer?

    --
    photosMy Photostream
    1. Re:how is it by ktakki · · Score: 4, Informative
      divvied up with the writer?

      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
  7. Artists should skip the label part! by seanthenerd · · Score: 3, Insightful

    Why don't artists skip the labels? Go straight to the Apple Music Store or mp3.com or whatever? With that extra thirty cents a song, they don't need support from Universal or Sony or whoever.

    Of course, the hard part is getting started...

    1. Re:Artists should skip the label part! by afidel · · Score: 2, Insightful

      Apple works with Indie labels, so start your own label, if you can meet whatever terms Apple has set to participate then you should be good. Hell some top artists could start a co-op label that could operate sort of like a limited partnership where the overhead of things like accountants, lawyers etc could be pooled and all of the profits could be funneled to those who produced them.

      --
      There are 4 boxes to use in the defense of liberty: soap, ballot, jury, ammo. Use in that order. Starting now.
    2. Re:Artists should skip the label part! by PerryMason · · Score: 4, Insightful

      Why don't artists skip the labels?

      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.

      --
      "I'm tired of all this 'Aren't humanity great' bullshit. We're a virus with shoes" - Bill Hicks
    3. Re:Artists should skip the label part! by Dylan+Zimmerman · · Score: 3, Informative

      Well, Apple works with indiependant labels, but labels can only join by invitation. That's why CD Baby's offer is so cool. They said that they were invited to sell their music on the iTMS and that they would sign independant bands and sell their music as a pipeline into the iTMS. Pretty cool of them.

    4. Re:Artists should skip the label part! by jjh37997 · · Score: 2, Insightful

      "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.... its not that the labels promote their clients its that they prevent radio stations from playing who they want via massive and illegal bribes. Tell me again why the record labels are a good thing?

    5. Re:Artists should skip the label part! by linuxbaby · · Score: 4, Informative
      That's a side project we're doing at CD Baby: Helping hook artists directly into iTunes and other download services. No record contract. No ownership of their rights. Just acting as a digital distributor.

      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).

    6. Re:Artists should skip the label part! by Martin+Blank · · Score: 2, Informative

      Like most things that seem bad, they have their upsides. In this particular case, the labels can afford to spend money on advertising and support for a group, making them known throughout a wider area. There are a few stations around that provide better coverage to unsigned or independent artists (Los Angeles's KLOS does this with their weekly Local Licks program), but by and large, major stations don't supply a lot of coverage to unknowns without a label or a trusted agent behind them.

      It's possible to get noticed and get publicity without labels, yes, but it's not easy, and if it flops can easily bankrupt a group (and their families).

      --
      You can never go home again... but I guess you can shop there.
    7. Re:Artists should skip the label part! by mighty+bombjack · · Score: 2, Insightful

      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.

      That is a rather bold (and i'm guessing unsubstantiated) claim.

      Firstly you will find that music is choosen by the triple j music director, not management. More on the music selection process can be found here.

      If inappropriate behaviour was being exhibited in this area it would be against abc editorial policies (triple j is part of this government funded body).

      Evidence please?

  8. That seems fair... by IronTek · · Score: 4, Funny

    Afterall, the labels need all of that money to keeping buying the bullets they constantly (and consistently) shoot themselves in the foot with.

    It adds up!

  9. Isn't that a step up? by Niahak · · Score: 5, Interesting

    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.

    1. Re:Isn't that a step up? by Hawthorne01 · · Score: 4, 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, it's a big step up.
      --
      "Only two things are infinite, the universe and human stupidity, and I'm not sure about the former."
  10. Measly 12%? by IthnkImParanoid · · Score: 5, Interesting

    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.
    1. Re:Measly 12%? by daveinthesky · · Score: 2, Informative

      I took a music publishing class which detailed all this stuff in gory detail. Average artists' cut on a new CD is ~$0.07. This cut gets even lower (read: as the limit approaches zero) if the album gets a lowered rating (decided by the label and is sold at a "discount" by the label (those 'bargain' bins you'll often see).

    2. Re:Measly 12%? by nobodyman · · Score: 5, Insightful
      You raise a good point. Here's a quote from Mike Viscelglia (he played bass for Suzanne Vega, I believe). His website has some good insight into the industry from sort of an "everyday joe" perspective.
      When an artist negotiates a contract (preferably through a music attorney) he or she must come to terms as to what share of the price of the CD goes to the artist and what share goes to the company. This is referred to as "points" or a percentage of sales. An industry standard point allocation to the artist is usually 10 to 12. This means that the artist will get 10 to 12 percent of the sale of the CD. But 10 to 12 percent of what number? Is it the retail price? The wholesale price? The manufacturer's price? For this there is no standard and different companies will try to enforce different numbers.

      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.
    3. Re:Measly 12%? by tuba_dude · · Score: 2, Interesting

      I think you hit it perfectly. A good majority of the top of the heap are probably manufactured, and that's probably why radio and MTV are so homogonized. Every once in a while you get a standout with his/her own talent like Norah Jones, who managed to make it big and sign on with a smaller label, which may be more willing to pay the artist more. (Norah Jones is with Blue Note, a small-ish, Jazz-oriented label, lots of classic jazz too) While I'm not sure how artists are paid by smaller companies, it's probably higher than with a company that spends more on their top or (hopefully) up-and-coming artists. Can anyone enlighten me?

      --
      "The government of the United States is not, in any sense, founded on the Christian religion."
    4. Re:Measly 12%? by geekee · · Score: 4, Interesting

      This is NOT insightful. REM, for instance, started out on a smaller label (IRS, I believe) and then moved to Warner brothers after they got a couple of hit songs. This is standard practice. Why do you think indie labels are giving artists better deals? An unknown artist is a huge risk. An artist with a hit under his belt looking for more exposure from a major label is a lower risk, so the major label gives this artist a better deal. Knowing this, it is clear that major labels do NOT sqash independent music, they thrive off it, looking for the next big star.

      --
      Vote for Pedro
  11. packaging costs!?!?! by the-build-chicken · · Score: 2, Funny

    BMG, Universal, and Warner have announced plans to do away with such deductions for digital downloads.

    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?

  12. So where's the credit card companies chunk? by Peter+Cooper · · Score: 3, Insightful

    Microtransactions have failed up to now because of the extreme costs involved in processing them. The credit card companies like to take a small flat rate fee and then a percentage on top. On amounts of a few dollars and up, the retailer can swallow this.. but on a buck? Regular deals with the credit card companies could end up with them getting about 40 cents out of the dollar.

    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 :-)

    1. Re:So where's the credit card companies chunk? by euphline · · Score: 2, Informative
      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.


      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. The CC companies have and do setup some accounts on a strictly percentage basis. I'm sure it's particularly easy to negotiate this when you're Apple and not joescomputershack.com... but it's not particularly a "special deal'.

      Have doubt? Try googling for "merchant account 'no per transaction'".

      -jbn

    2. Re:So where's the credit card companies chunk? by Jah-Wren+Ryel · · Score: 4, Informative

      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.
    3. Re:So where's the credit card companies chunk? by DarkEdgeX · · Score: 2, 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

      Make sure to let it scroll down automatically, or click on the FAQ entry for minimum purchase to use a Visa card.

      --
      All I know about Bush is I had a good job when Clinton was president.
    4. Re:So where's the credit card companies chunk? by DarkEdgeX · · Score: 2, Informative

      And here's one for Master Card--

      http://global.mastercard.com/hk/faq.html#c_cust_se rv

      Same as the Visa, be sure to let it load, or just do a text search for "minimum".

      --
      All I know about Bush is I had a good job when Clinton was president.
  13. Suprised? No. by Anonymous Coward · · Score: 3, Insightful

    This is why the record companies churn out the music they do. All they need is an ``artist'' willing to sing some and dance a little to bring in money. They recording industry money machine encompasses the studios, engineers, musicians, distribution, etc, and the money flow chart has no money going out of that process. They take in new money and recycle what they already have.

    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.

  14. Same as album sales! by sould · · Score: 4, Informative

    According to this guy, artists only get 10%-12% of the cost of the CD.

    And thats after paying for promotion. Depressing stuff.

    1. Re:Same as album sales! by black+mariah · · Score: 2, Informative

      It's usually less than that. Think MAYBE a dollar a CD. You have to remember, artists have to pay back their advance and all recording costs. Record labels will fuck bands out of anything and everything they can get away with, the greedy cunts. "I have no talent, no ambition, and wear a shitty suit. I deserver 80% of what you earn." Fuckers.

      --
      'Standards' in computing only impress those who are impressed by things like 'standards'.
  15. Always get burned! by UcensorMe · · Score: 2, Insightful

    When you make a deal with the devil, you will always get burned. Most artist are stupid about the deals they make and then bitch about gettin screwed. Look how these fools give away thier publishing rights.

  16. who's the dumbass? by DohDamit · · Score: 2, Informative

    It's not 0/0, stupid asshat. It's 0/100. Stupid trolls...the next evolution.

  17. I'd be pissed by 00Monkey · · Score: 3, Funny

    I'm a rapper and if I made it big, 12 cents wouldn't be enough...that's for damn sure.

    1. Re:I'd be pissed by Graff · · Score: 4, Insightful
      I'm a rapper and if I made it big, 12 cents wouldn't be enough

      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?
    2. Re:I'd be pissed by heli0 · · Score: 2, Insightful

      Courtney Love does the math ...The record is a big hit and sells a million copies.

      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. ...the band may as well be working at a 7-Eleven.

      Worst of all, after all this, the band owns none of its work ... they can pay the mortgage forever but they'll never own the house. Like I said: Sharecropping. Our media says, "Boo hoo, poor pop stars, they had a nice ride. Fuck them for speaking up"; but I say this dialogue is imperative. And cynical media people, who are more fascinated with celebrity than most celebrities, need to reacquaint themselves with their value systems.

      When you look at the legal line on a CD, it says copyright 1976 Atlantic Records or copyright 1996 RCA Records. When you look at a book, though, it'll say something like copyright 1999 Susan Faludi, or David Foster Wallace. Authors own their books and license them to publishers. When the contract runs out, writers gets their books back. But record companies own our copyrights forever.


      --
      Whenever the offence inspires less horror than the punishment, the rigour of penal law is obliged to give way...
    3. Re:I'd be pissed by groundpig · · Score: 5, Funny

      I'm a rapper and if I made it big, 12 cents wouldn't be enough...that's for damn sure.

      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.

    4. Re:I'd be pissed by happyhangone · · Score: 4, Interesting

      IF the album goes gold, and they got to pay for the promotion and music videos... and those videos doesn't come cheap...

      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 ... zero!

      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

    5. Re:I'd be pissed by Graff · · Score: 3, Insightful
      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.

      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.

      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.

      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:
      The band gets 2 million (20% of $11 million in sales) and then gets charged:
      $2,000,000 - royalties
      - $ 500,000 - 50% of 1 million for videos
      - $ 200,000 - for the tour, which is really an investment for
      the artist since tours MAKE money for artists
      - $ 300,000 - for radio promotion, again an investment
      that drives up their record sales
      ------------
      $1,000,000 - leaving them basically with their original
      advance of $1,000,000

      The record company makes 11 million and has to pay out the following
      $11,000,000 - her numbers for record company gross
      - $ 500,000 - manufacture CDs
      - $ 1,000,000 - band's advance
      - $ 1,000,000 - video costs
      (wait, didn't the band pay 1/2 of this?)
      - $ 300,000 - radio promotion
      (again, didn't the band pay for this?)
      - $ 200,000 - tour support
      (band paid, right? or maybe Ms. Love is just
      incoherent at this point)
      - $ 750,000 - music publishing royalties
      (to who? the artists? the record company? very odd...)
      - $ 2,200,000 - marketing
      -------------
      $ 5,050,000 - profit. wait, didn't she say they made $6.6 million?
      by her numbers she is off by $1.55 million
      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.
    6. Re:I'd be pissed by clambake · · Score: 3, Insightful

      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?

      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.

  18. Mesaly? by Devil+Ducky · · Score: 3, Insightful

    Considering that if you went to a store and bought an overpriced CD, the artist would get somewhere around 1-3 cents per CD; I don't think that 12 cents per song is a bad deal. I was quite surprised by how often, from Apple's claims, people are downloading whole CDs from them. Then I thought it out. $1 per song, 15 songs: $15 from iTunes; $20 from a store... plus I don't have to get up and walk to the car to drive to the store. Anything that saves you money while making you lazier will be a success.

    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.

    --

    Devil Ducky
    MY peers would get out of jury duty.
    1. Re:Mesaly? by black+mariah · · Score: 3, Informative

      It's closer to a dollar a CD. Just keep in mind that out of that dollar the band has to pay for paying back it's advance from the label, pay back all recording costs, and pay for any and all touring they do. I don't know any other business where the employees get fucked over so much.

      --
      'Standards' in computing only impress those who are impressed by things like 'standards'.
  19. And thats exactly how it should be by Anonymous Coward · · Score: 3, Insightful

    When you buy a car, how much of that money do you figure goes to each engineer who was involved in designing it? Probably much less than the profit margin of the dealer or the car company. Now think about the modern popular music industry: It truly is built on huge economies of scale, and just like that car, every track of music you buy is the result of the work of many different people. The task of the "artist" themselves varies depending on the particular group, but as a general rule, they are more replaceable than a highly-trained engineer, and each has unique value mainly because of their public image, which is itself crafted by record company marketing departments. Nonetheless, probably no one person receives a larger share of this money than the "artist" involved, which is in many ways unfair considering the amount of effort put in by producers, recording engineers, and of course the marketing department, but obviously the market viability of the work depends to a certain extent on the presence of the artist, so the market rewards them with a greater share. These figures, in short, are simply proof that free markets are working well.

    (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)

  20. Top Artists Balking At A La Carte Downloads by mechaZardoz · · Score: 5, Interesting
    billboard article

    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.

  21. Business 2.0 by ejaw5 · · Score: 5, Funny

    is this Business 2.0 "Full Speed" or "High Speed"?

    --

    $cat /dev/random > Sig
    1. Re:Business 2.0 by blowhole · · Score: 2, Funny

      I asked my boss what kind of Business he was running. He said something about Firewire and made me clean out my desk.

      --
      "Ask me about Loom"
  22. Measly? For some, excellent for most by gad_zuki! · · Score: 4, Insightful

    The article states that 12% is average. Only high-successful acts can do better and they are completely free not to opt-in to Apple's music store like Radiohead and Linkin Park have decided to do.

    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.

  23. Seems about right by Billly+Gates · · Score: 2, Informative
    First off 30 + 40 + 12 != 100.

    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.

    1. Re:Seems about right by leviramsey · · Score: 2, 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:

      • 16% Elektra Records
      • 16% Q Prime (the management company)
      • 20% Lars Ulrich
      • 20% James Hetfield
      • 16% Kirk Hammett
      • 12% Rob Trujillo

      Every dollar Metallica earns goes through that corporation and is counted as revenue. Expenses such as touring, office expenses (for running the fan club), promotion, record production, etc. are deducted, and a percentage of the profits and retained earnings of the corporation are paid out as dividends (I imagine Lars, James, Kirk, and Rob are somewhat in favor of making dividends tax-free, as that would basically make 100% of their incomes tax-free!).

      E/M Ventures maintains a manufacturing and distribution contract with Elektra, with a 50/50 split of wholesale prices (all this is basically risk-free money for Elektra), . Elektra is legally obligated to distribute any and all material Metallica chooses to have distributed in North America. And since, between them, any three members of the band have voting control of the corporation, what they say goes; if the band wants to release an album full of bluegrass, Elektra is obligated to send it to stores (with Elektra getting a gross profit of about $2.00 per unit, not counting their E/M dividends).

      Elektra took this deal because it gave them a huge cut of the non-recording business of Metallica, which is virtually incomparable in this era. When Metallica tours, they are their own promoters. They rent at a flat rate the stadium or amphitheatre or arena. They pay the opening acts. Essentially all the risk is taken by E/M Ventures, and the massive profits go to E/M. The same is true for licensing of the Metallica name and logo.

  24. What is the label doing? by ukyoCE · · Score: 2, Insightful

    Does the label really do nothing more than provide $$ in advance (ie: an EXTRAORDINARILY high interest loan) and provide some of the contacts (advertising means, etc.) for the artist to spend the advance on?

    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?

  25. RTFA by xombo · · Score: 2

    Look at the article, those are just key percentages, there is more to be given out, and it is in a chart on the article.

  26. oh I'm gunna get flamed for this... by the-build-chicken · · Score: 2, Interesting

    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)

  27. Consumers should decide! by dekashizl · · Score: 5, Funny
    I think that instead of a flat $1 per song, you should be able to have a payment form like a restaurant bill with a flexible tip, like:
    $[1.00] Song
    $[0.05] Service Bonus
    $[0.20] Artist Bonus
    $[0.00] Label Bonus
    ===
    $ 1.25 Total

    Thank you for using iTunes and have a nice day!
  28. actually it's surprising by b17bmbr · · Score: 3, Insightful

    very few artists, except for metallicunt and a few others, bitch about file trading. artists make their money on the road. in fact, most don't even own the music. they are treated like 2 dollar vegas whores, get paid for shit, and are turned out like a sorority girl in the morning when their records stop selling. file trading helps the artists by giving them more exposure, and generates fans which go see them live. in fact, i'm actually surprised the in the IP sense, they don't get a dime.

    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?

    --
    My problem? I was perfectly gruntled, until some numbnuts came by and dissed me.
    1. Re:actually it's surprising by Sheetrock · · Score: 3, Interesting
      I've seen this argument a great deal, but it sounds much more plausible that the artists are mum about file trading because they don't want the backlash from P2Pers that 'metallicunt' suffered when they went on the offensive. I can't imagine that many of these artists that are getting screwed by the music industry are thrilled to find their songs being traded via P2P -- after all, when they actually collect royalties they aren't that hot, so every bit they miss out on hurts.

      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.




  29. Sounds Like A Great Deal To Me by istartedi · · Score: 3, 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.

    --
    For all intensive purposes, "whom" is no longer a word. That begs the question, "who cares"?
  30. Great, assume this model works by zakezuke · · Score: 2, Interesting

    ...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.
    1. Re:Great, assume this model works by kris · · Score: 3, Interesting

      ....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?

      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

  31. You're fogetting... by cshark · · Score: 4, Informative

    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...

    --

    This signature has Super Cow Powers

    1. Re:You're fogetting... by AndroidCat · · Score: 5, Informative

      It's about the movie industry, but Fatal Subtraction is a good look at how these sorts of industries play numbers games. (Coming to America was a $350-million-grossing movie never earned "net profits".)

      --
      One line blog. I hear that they're called Twitters now.
    2. Re:You're fogetting... by McAddress · · Score: 5, Interesting
      But the two percent of the market they are targeting is the cream of the crop of consumers.
      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.

    3. Re:You're fogetting... by Halo1 · · Score: 3, Insightful
      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)
      That's not just flamebait, it's plain wrong. Or did you forget about the Cube?
      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.
      Huh? Even Apple themselves hold sales every now and then, though they don't advertise them as such most of the time. They simply slash prices of systems that are going to be renewed in the near future. When they do hold an explicit sale, it means their inventory management failed, but I've seen that happen only once since Steve Jobs came back to Apple (Januari 2001, I remember that since I took advantage of it by buying my G4/400).
      That is why the iTunes music store was such an unprecidented success. It was not just sheer luck.
      I completely agree it was not just sheer luck. It was actually listening to the complaints of the consumers instead of trying to convince them that they were wrong (like the music industry does).
      --
      Donate free food here
    4. Re:You're fogetting... by chimpo13 · · Score: 2, Interesting

      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.

  32. Re:12%, so? what do you get? by AntiOrganic · · Score: 2, Insightful

    No, you wouldn't. But say instead that your department gets 12% of the cut, which isn't that unrealistic.

    Artists don't make money by themselves. Most successful artists are bands with five members (for the sake of argument, even solo artists have touring ensembles, session musicians, etc.), management (which typically will take 15% of your gross earnings), and tour promoters, who will take a further cut.

    Don't forget, bands also have to pay back the record companies for all the money that the company spends marketing and promoting their product. So figure that for your first four albums or so, your 12% probably amounts to negative money.

    Can't leave out income taxes, either.

    So how much does everyone really end up with? Unless you're huge, probably somewhere in the realm of 10 to 15 cents per album sold.

  33. is 12% really that low? by lord+sibn · · Score: 3, Insightful

    Let's put this in perspective here. I work for a large retailer that grosses $60,000 per day or more (per store, not company-wide). How much of this money do I make in this same day? typically between $28 and $40. That's about 0.25% (give or take) of the gross revenues, for those of you not mathematically inclined. To put this in perspective, they're grossing about 50 times as much as I am, per dollar earned.

    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.

  34. Some Perspective by Anonymous Coward · · Score: 2, Funny


    I don't get anywhere near 12% of what my employer is raking in for all the software that I write.

    If I did, I would see about hiring an assistant.

  35. Royalties: Comparison to Publishing by Nova+Express · · Score: 2, Insightful

    People should keep these rates in perspective with comparison to how much a writer makes off book publishing: A 12% royalty on paperback sales is much higher than normal, and 12% for a hardback is toward the high end of normal. 12% would be a more than respectible rate for a beginning-to-midlist author. (Stephen King and other bestsellers, of course, can get considerably more.) Also, a beginning writer usual gets between $3000-$5000 dollars as an advance on royalties (granted, the ways to screw writers after the advance have been given are far less numerous than in the recording industry...). Usually, there will be escalator clauses that bring higher rates after X number of books have been sold. Anyway, these are ballpark numbers for the science fiction field. Source: The SFWA Handbook, 1990, p. 62-69. (Note: Since 1990, if anything, rates have gotten worse, especially for midlist writers.) I am given to understand that advances in the Romance genre can be as low as $1000 for all rights (i.e., no royalties).

    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.

    --
    Lawrence Person (lawrencepersonh@gmailh.com (remove all "h"s to mail)

    http://www.lawrenceperson.com/

    1. Re:Royalties: Comparison to Publishing by evilviper · · Score: 2, Insightful

      That may be true, but in book publishing, there are substantial costs for the publisher. Paper really isn't cheap, and shipping thousands upon thousands of pounds of it across the country is not cheap either. Contrast that with CD or online distribution. With online distribution, there is a tiny cost for each copy downloaded... No more books need to be printed, no more shipping needed. So, the label is taking almost half for themselves, but how much did they put in? Only the biggest artists get the amazing studios, the little guys only get the super-cheap studios, so it's not as if the production costs are high.

      What needs to be done is, to have a small record company expand. Instead of everyone having their own label, have one large one that gives a larger percent to the artist, but also recruits groups that aren't yet popular, giving them the same advantage. That would allow a label to do the same advertising, and pushing their product as the big guys do, but without the artists getting raped for no reason.

      --
      Slashdot gets worse every day... Pipedot: News for nerds, without the corporate slant
  36. Have you seen the Courtney Love Salon article by joeflies · · Score: 3, Interesting
    Very interesting article, although it's fairly old now (originally in 2000). Very enlightening, however.

    Courtney Love Does the Math

  37. Re:0/0 != 100%, it is undefined, dumbass by etymxris · · Score: 2, Insightful

    Yes, that's the point. Math is an algorithmic process, one that gives answers to various well defined questions. You can ask an unanswerable question, such as "What percentage of 0 is X?" or you can ask an answerable question, such as "What is X% of 0?". The first question will literally have no answer, the second will always be zero.

  38. Re:Artists not making enough? Balderdash! by AntiOrganic · · Score: 2, Insightful

    Why do millions of people use AOL for Internet access? Some people don't know any better. People with no computer experience buy the hype and believe that it's the greatest thing since sliced bread. The same thing applies to musicians in the record industry.

    It's fairly accepted that if you ever want to make it "big", you need to be partnered up with a major label. Whether or not it's actually the case, the popular misconception is certainly pervasive enough to convince many people to screw themselves into shit contracts.

    Part of it is also psychological. If a scout from Sony approached you and wanted to sign you, you would probably be more excited than if some mom-and-pop BaBango Records from the other side of town wanted to push your EP. To many people, being signed to a major label gives them a feeling that they, to a degree, have already "made it." Many years later they tend to regret their dealings.

    And many artists DO start up their own labels. Some are rather successful at it, such as Steve Vai and his Favored Nations label, but most musicians don't have the business sense to manage a company like that.

  39. Artists are getting exactly what they deserve. by 0x0d0a · · Score: 5, Insightful

    If Joe Sixpack asks for $47k pay for his job, medical benefits, and the ability to leave with two weeks notice, he can't then turn right around and whine that he isn't making $55k and identical bennies. He got what he asked for.

    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.

    1. Re:Artists are getting exactly what they deserve. by tuba_dude · · Score: 4, Interesting
      I don't think that's the issue. iTunes is paying better than most other deals, and so I don't think anyone is complaining about that. I think that the reason artists choose the indie "I hope I can make it without any help" route or the big5(?) "Hey, they'll help me get started. I hope I sell enough copes to keep up with their quota" is because they either don't know about alternative choices, are afriad of flying completely solo (so to speak), or they get pressured into contracts by smooth-talking salesmen. Sorry for the run on, but does it make sense?

      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."
    2. Re:Artists are getting exactly what they deserve. by chamenos · · Score: 2, Insightful

      "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."

      that's the most insightful post i've read all day. the large majority of pro-file-sharing and anti-RIAA /.ers are just leeches who want free shit. the whole pity-the-poor-artistes rhetoric is usually just an unconscious or semi-conscious attempt by said leeches to justify their actions to themselves.

    3. Re:Artists are getting exactly what they deserve. by TyrranzzX · · Score: 2, Insightful

      f 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).

      Actually, it works a bit more like this;

      Jimmy drummaster and his band is offered a "big deal" from a record label. They then ask him and his band sign off all the rights to their music to the record label for measly quantity of money, or they walk and goto another hopeful band. If jimmy and his band doesn't like it, they can stuff it becuase the record company has the rights to his music and he has no right to distribute it anymore. He makes his money by touring; letting the music company sell his music is just promotion.

      How it should work is that jimmy makes the music, the company promotes it and they cut the profits. If the label isn't willing to take the risk, they can stuff it.

    4. Re:Artists are getting exactly what they deserve. by dirk · · Score: 2, Insightful

      Jimmy drummaster and his band is offered a "big deal" from a record label. They then ask him and his band sign off all the rights to their music to the record label for measly quantity of money, or they walk and goto another hopeful band. If jimmy and his band doesn't like it, they can stuff it becuase the record company has the rights to his music and he has no right to distribute it anymore. He makes his money by touring; letting the music company sell his music is just promotion.

      How it should work is that jimmy makes the music, the company promotes it and they cut the profits. If the label isn't willing to take the risk, they can stuff it.


      No one is sayign that isn't how it should work, but the reason it works the way it does now is that the artists agree to it. They sign an agreement that let's the record companies take most of the profits and keep control of their music, and then complain later about an agreeement they willingly signed. If they don;t want to agree to the terms of the deal, then they shouldn't sign with a major label. I think Ani Difranco (one of the few real indie artists around) said it best "and don't tell me what they did to you/as though you had no choice/tell me, isn't that your picture?/isn't that your voice?" You give up all rights to complain about the deal when you agree that the deal is fair and sign off on it.

      --

      "Information wants to be expensive" - Stewart Brand, the same guy who said "Information wants to be free"
    5. Re:Artists are getting exactly what they deserve. by mkldev · · Score: 2, Interesting
      See, that's the thing. This is only a problem for artists because they generally have zero knowledge of the legal systemâ"less than even an average personâ"and because they're scared highâ"school-aged children who don't want to be sued.

      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.
  40. This is *several* times better... by leviramsey · · Score: 4, 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.

  41. Who cares???? by Cyclone66 · · Score: 2, Interesting

    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!

  42. Ripoff! It's as worse as CDs. by oohp · · Score: 2, Informative

    This is as worse as CD distribution by the record labels. Apple should've striked deals directly with the artists. Hm, if the artists got say .60, then they'd have to sell 5 times as little as they sell now to get the same amount of money. This is bloody ripoff.

    On the other hand it also costs as much as regular CDs. You get like ~10-15 songs on a regular CD, which is around $15. If you download 15 songs from Apple, you also end up spending $15, as much as you spent for the CD. Maybe a little cheaper because a CD doesn't always have 15 songs on it. But still.

    Ripoff! First, the artists are ripped off, then you, the consumer. I mean it's somehow fair for Apple to get .40 out of it, but the record labels and the publisher? Give me a break!

    The record labels are the media intrustry's dinosaurs. And Dinosaurs will die.

  43. I can't quote it by squarefish · · Score: 3, Interesting

    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.

    another slice of info that was rejected by /.'s editors:
    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.
  44. Re:Royalties -- You Are Close by Not+The+Real+Me · · Score: 4, Informative

    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.

  45. 12.5% is what a book author gets too .. by chris_sawtell · · Score: 3, Interesting

    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.

  46. why don't they sell their own online? by polished+look+2 · · Score: 2, Interesting

    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.

  47. So what by Anonymous Coward · · Score: 2, Insightful

    What makes the artist's time so much more valuable than everyone else's? A record company surely must have studio workers, a marketing department, accountants, systems people, administration, human resources, and all the other conveniences of a modern corporation.

    A farmer doesn't get 50% of every can of corn sold. Maybe that doesn't seem fair, but he's not the only person involved. Someone has to package it, someone has to ship it, someone has to provide the shelf space for it, and someone has to ring it up at the checkout. And, of course, there are other costs. The supermarket and the distributor have to establish a relationship, coordinate shipments with demand, and so forth. All of this takes work.

  48. not the same thing.... by Vellmont · · Score: 2, Interesting

    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
  49. One sentence. by ihatesco · · Score: 2, Insightful

    Artists still screwed.

    + + + +
    Rationale:

    - the companies are not producing the music, the
    artists do. Without the artists, companies are
    nothing.
    - companies have a role only of intermediators

    + + + +
    If I was to release a song to the world, and the company was to tell me "for your promotion we get 85 cents over your dollar" I would tell them, "screw you and your promotion".

    --
    "I am slashbot, hear me roar!"
  50. Re:employees getting "fucked over" by black+mariah · · Score: 3, Insightful

    Exactly. Everyone forgets that the 'rock stars' account for maybe one tenth of one percent of the WORKING musicians out there. They don't seem to understand that being a musician and being a rock star are two different things. Musicians generally spend all day at work, the lucky ones only have to work part time, the even luckier ones don't HAVE to have a real job, but do so because it means more gear and extra shit. Writing music is not easy. Booking gigs can take hours of club owner harrassment a day. Loading up for a gig usually takes a couple of hours of hauling heavy-ass equipment around. Then you have to unload at the gig. Then reload afterwards. Then unload back home. If you are a working, gigging, musician it's HARD FUCKING WORK. There aren't any roadies to carry your shit. There aren't any green rooms full of free food and beer. There aren't any bigass paychecks waiting for you at home. All you have is maybe a couple of hundred bucks (if you're lucky) and hopefully the ability to go home knowing you put on a badass show, because at the REAL musician level that's all it's about.

    --
    'Standards' in computing only impress those who are impressed by things like 'standards'.
  51. Is $9.99 a good deal from iTunes Music Store? by alangmead · · Score: 3, Insightful

    Compare the two products.

    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.

  52. changing the distribution channel changes nothing by gelfling · · Score: 2, Interesting

    As I've said for years - changing the distribution channel changes nothing for the artists. The system is rigged to not pay the artists.

  53. Lousy deals and the death of the album. by MsGeek · · Score: 5, Interesting
    • the site takes .40,
    • the labels take .30 and
    • the labels take another 12 cents from the artist's share to recoup "production advances" and "independent promotion"

    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:

    1. 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.
    2. 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.