Gabriel and Eno Start Digital Music Artist Union

An anonymous reader writes "We have long heard stories about how the record companies cheat their own artists with audit techniques that would make Enron blush. They are already applying the same techniques to the revenues they draw from digital download sites like Apple iTunes, which is one reason many artists have refused to allow their music be sold through them (those who can control it at least). Looking to take a stand in the digital music arena before these practices become status quo Peter Gabriel and Brian Eno are starting a new union the "Magnificent Union of Digitally Downloading Artists" or MUDDA. Gabriel, co-founder of OD2 - an iTunes competitor - has that company as a first source to negotiate terms with the new union."

Comments

Peter Gabriel has a conscience

[Space cowboy]

He's done a lot of work for charity, and lots of his songs point out inequality/bigotry/social issues. I have a lot of respect for a bloke who can make good music with such activism inherent in the whole thing. It'll take a guy with this level of credibility to really hit the music industry where it hurts. ... cos basically we want to reform it, so we can start actually buying CD's and so on again, right ? Or download (and pay for) them from the internet... Oh happy day...

Simon

Re:itunes at fault?

[Abjifyicious]

I'm pretty sure that in every iTunes sale, Apple keeps something around thirty cents and passes the rest to the label. The thing that can vary is the amount of money that's passed through the label and on to the artist.

With the major labels for instance, the artist might get something like ten cents per song sold. On the other end of the spectrum, an artist selling their music through CDBaby gets something around 60 cents per song sold.

cdBaby gets major digital distro 4 indie artists

[Speequinox]

I do Web design for a Middle-Eastern Jewish band, and, like 54,360 other independant artists, they sell their CD at CDBaby.com. Unlike traditional distribution schemes that leave signed bands with, say, 25 cents for every CD (which they have to split among the band members), CDBaby takes only $4 from every sale and gives the rest to the artist. They have already paid out over $6 million to independant artists, and they are univerally loved by those artists.

If the artist so requests, CDBaby will also shop the CD to download services like Rhapsody, BuyMusic, Emusic, the new Napster, AOL's MusicNet, and MusicMatch (no iTunes yet). The cool part is that CDBaby only takes 5% of what the download services pay them, passing on the rest, which is about 60 cents per track, to the artist, and when they do that they forward the detailed accounting report to the artist.

This is great, CDBaby has an impeccable track record of honesty and fair dealing with the artists, and 60 cents is more per track than what the vast majority of signed artists get per entire CD. But the potential for accounting shenanigans perpetrated by the download services themselves is high. They could simply lie, or fail to correct some error in their accounting software, and the artist would be none the wiser. CDBaby already helps independant artists by harnessing the collective bargaining power of all its members, but the additional pressure and oversight of a union like Mudda could help keep the pressure on.

The iTunes Quandry: 13% v. 50%

[ClickTheVote]

The Anonymous Coward submitting this story knows a little inside baseball that has yet to really hit the press. Standard recording artist contracts before 1998 treated revenue generated by licenses differently than revenue generated by CD sales.

For a CD sale the label pays the artist about 13% of wholesale, minus various charges like packaging deductions, to recoup against all advances. In a licensing scenario where, for example, a recording is synchronized in a movie or TV show, the labels pays 50% of revenue without any deductions.

The labels licensed some of their catalogs to Apple but want to treat that revenue like a CD sale at 13% and not as licensing revenue at 50%. That is why in large part some of the more popular artists with more leverage have been holding back on granting permission. It is also probably the major obstacle to record labels licensing for P2P sharing.

The whole thing will come to a head later this year when the record labels must issue royalty statements to the artists showing how they treated the iTunes revenue. Gabriel and Eno are organizing artists for that battle.

Music fans should be organzing too .