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How Labels And Artists Divvy Up Your Dollar Online

Posted by timothy on from the heads-i-win-tails-you-guessed-it dept.

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."

15 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.

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

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

  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?"
  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].

  5. 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.

  6. 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 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.
  7. 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.

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

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

    --

    $cat /dev/random > Sig
  9. 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!
  10. 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.

  11. 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.
  12. 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.

    --
    May we never see th
  13. 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.

  14. 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.