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Japanese Musicians Defy Sony by Joining iTunes
Homework Help writes "Japanese musicians under contract by Sony are defying their contracts by using Apple's iTunes service to deliver songs. Rock Musician Hotoharu Sano points out: 'It is an individual's freedom where that person chooses to listen to music. I want to deliver my music wherever my listeners are.' Sony Music Entertainment and Apple are still locked in talks and no agreement has been reached so far. Apple's offering of its iTunes service at lower cost in Japan is greatly attributed to their success." From the article: " Before iTunes' arrival, Japan's top music download service, which is backed by Sony and includes Sony recording artists, averaged about 450,000 downloads a month. By offering its service for lower prices, Apple is undercutting such online music services. Japanese are accustomed to paying twice as much as Apple is charging in Japan, which are still higher than the 99 cents charged in the U.S."
Everything is more expensive in Japan, even Videos and Cds, but it's nice to see Apple realizes it doesn't have to be that much more, and is showing it by undercutting the cost of the service.
It's the freaking internet, all they pay for is bandwidth and the music. Good to see that some companies remember that and are trying to avoid gouging. I just hope apple continues that path.
But you sold away that right in exchange from a large advance from Sony. You can't have it both ways. You can have your freedom or you can take the corporate dollar.
When you sup with the devil, use a long spoon.
Athletic Scholarships to universities make as much sense as academic scholarships to sports teams.
What is it these days??
People sign things like NDAs, record deals, and professional sports contracts, and then expect us to be sympathetic when they decide not to honor their agreements?
Want your music to be free (speech)? Great! Then don't sign a contract with a major label! It's that simple!
"Ask not what your country can do for you." --John F. Kennedy
iTuning Japanese, iTuning Japanese, I really think so.
Give it a month or so and they will probably be going through 450,000 songs a day. I'm guessing that the reduced price has more to do with it than the Apple Brand. It looks like Apple is going to sell a lot of iPods to Japanese consumers.
I wonder if these latest developments will be enough to bring Sony around to reaching an agreement with Apple.
But you sold away that right in exchange from a large advance from Sony
Are you sure? That would depend on the details of their contract and the details of Japanese contract law, wouldn't it? Depending on those details they may well have sold away the right to Sony to distribute their work on CD while retaining some sort of right to independently negotiate sales through other entities on new mediums.
We don't have copies of their contracts, so we don't know. But something of this sort is clearly the case with Mr. Motoharu Sano who said the thing you quote; otherwise Apple certainly would not have allowed his music onto their store in the first place, as doing so would have been illegal.
You can't have it both ways. You can have your freedom or you can take the corporate dollar.
This seems to be the case right now, but only in a practical or logistics sense. Aside from purely practical matters, there seems to be no good reason why this is the case, and so there is no good reason to shrug things off and accept the way things are. Not all evils are necessary.
Irritable, left-wing and possibly humorous bumper stickers and t-shirts
These days there is very little need for the majors. Everything that musicians need to produce, promote and distribute music is cheap. But the majors have a stranglehold on the media - it's far harder to get mainstream exposure when you aren't playing the payola game (e.g. Sony).
Still unless musicians stand up to the majors and say no to crap contracts, and unless fans start supporting musicians that go the tougher indy route (by not stealing their music when they should be buying), things will move slowly, if at all.
The industry cannot compete on the internet effectively, and artists are awakening to the fact that in such a venue, they don't need to become the indentured servants of record companies just to see global distribution. The fact is, if they sell so much as one album on their own, they've made more money than 85 percent of the recording artists signed to major labels alone--who do not sell enough albums to recoup their recording advance.
Using the royalty computation model explained in "All You Need to Know About the Music Business" by Don Passman, an industry lawyer and professor, the average mid-level artist has to sell a quarter-million albums just to start seeing a dime of royalties.
This luring of artists away from their record companies, into direct distribution, and cutting out about 9 or 10 middle-entities along the way, is basically "phase two" of the emergence of internet distribution as the dominant model.
To make matters more interesting... Think about the implications here... In a world where even an artist selling 500 copies can make a better profit than a Britney Spears should her latest album sell less than enough to cover whatever six or seven figure advance she's been paid, there's going to be a much bigger selection of talented artistry out there... available for mass consumption. One won't have to resort to ridiculous marketing and promotions to make a buck... and that will make it harder for Britney Spears and the like to dominate the scene because they essentially bring nothing to the table
Record companies with their moronic A&R departments so myopically focused on putting every last ounce of energy into pushing only the biggest international artists stand to lose everything... and their employees along with it (especially the overpaid, underimaginative executives).
So, if you're still wondering why RIAA spends so much time, effort and money ice-skating uphill... It's because they have everything to lose, anyway. All they can do now is try to postpone the inevitable... and they're failing to do even that. But if they let down, it means they're going to have to get off their asses and find real jobs.
More importantly, it's a loan from which the costs of recording are paid. In other words... Out of that advance, Britney has to pay:
1. The studio
2. The producer
3. The musicians
4. The songwriters
5. The backup singers
6. The business agent
7. The manager
8. Security
9. Staff
10. Personal assistants
11. Music techs
12. Sound engineers (yes, they cost extra)
13. Transportation
Usually, the entire advance gets spent on all of the above... the artist is now sitting with zero in the bank or even a negative balance after all is said and done.
Now here's where it gets scary...
The entire advance is a loan... That's right... it's owed back to the record company.
Recoupment works like this...
If Warner Bros. pays you a $500,000 advance for album 1, and has you optioned for three more...
First you have to recoup the $500,000... but you don't recoup it at the gross MSRP of the albums sold. You recoup it at your royalty rate.
The royalty rate an artist gets is not based on the MSRP. In other words, if an album retails for $15.98, the artist's cut... probably around 14% for Britney... is not 14% of $15.98. It's 14% of the royalty base less gross margin, i.e. about $7.98 ... after deducting marketing, distribution, packaging, promotions, and related costs.
So now, that's about $1.12... pretty high actually for a Britney, believe it or not. But let's be generous and say that her royalty is $1.12.
She has to recoup the $500,000 at that rate... $1.12 per album. So, she has to sell 446,428 albums just to pay back her advance.
Now... UNTIL she pays back her advance, she does not get to keep a DIME of royalties. So, given that with a $500,000 advance she's probably spent every last dime of it, she's going to be broke if her album doesn't go gold. What's worse, she's still tied to her contract until she delivers the other optioned albums.
But wait, it gets worse...
If she gets a larger advance, she now has to sell even more albums to pay back the advance, meaning it takes even longer before she gets paid a dime... and usually when artists get a larger advance, they still blow every dime of it on all the aforementioned expenses.
But here's what's more... If she has any contracts with band members or producers to get paid royalties... their percentage take comes OUT OF that $1.12... Then the business agent and managers take their cut... 15% of what's left? No, 15% of $1.12 per album.
It still gets worse... the artist is the last person to get paid. The business manager handles all disbursements (just like a lawyer on retainer)... everybody else gets paid, then the artist takes what's left.
It gets worse, still... If any tracks on the demo submitted to the A&R department are rejected, Britney has to go back to the studio and record some more...but if she's blown her advance already, then the additional recording costs come out of her pocket.
It gets even worse, even now...
If Britney's album is a failure and lets say $200,000 has not been recouped... When her next album is due, the $200,000 unrecouped balance gets pooled with the advance for the new album. Now she has to still recoup both... but there's more. Until she has paid off all her debts, she cannot get out of her contract... she still owes the record company material.
But there's still more...
The record company may incur additional expenses related to the promotion of the album... whenever an A&R agent wines & dines a program director at a radio station, whenever someone uses a jet to fly from LA to New York and meet with program directors there, whenever transportation costs and other overhead expenditures are incurred in relation to the promotion of her album, etc.... all these expenses are deducted from her advance and/or royalty checks first.