Slashdot Mirror
How iTunes Hurts Weird Al
Johnny X writes "Weird Al Yankovic recently said he makes far less money when you buy from iTunes than when you buy an actual CD. This guy did the math and showed that Weird Al could be losing up to 85% of his record sales income due to the 'weird' ways the record companies compute digital sales. Are all artists getting the shaft like this?"
Is the RIAA still in charge?
Sounds like a good opporitunity to write an R.E.M. parody... "Losing my Commission"
He didn't seem to be complaining. He merely said he didn't understand why they want to take more out when there are fewer distribution costs.
TFA seems to blame iTunes, at least at heart. Wouldn't the actual problem here be the messed up, backwards, hacked way the (MP|RI)AA have decided to handle this newfangled technology called the internet?
ACs are modded -6. I don't read you, I don't mod you, I don't see you. Don't like it? Don't be a coward.
Record companies find ways to give artists even less money. You knew it was going to happen. To the record companies, it is not about the music, but the money. Since the early days in the 50's they have been writing draconian contracts, then stealing the copyrights from the artists (remember the "musicians are craftsmen not artists" argument they were throwing around) and now this. Pretty soon, the artists will have to PAY the record companies for the priviledge of getting screwed.
Boffoonery - downloadable Comedy Benefit for Bletchley Park
Isn't this interesting, after all the noise the industry made about going after illegal music downloads, all in the name of helping the artists. They then turn around and pay the artist next to nothing for the iTunes download you are supposed to buy because you want to 'support the artist'.
Musicians will continue to "get the shaft" as long as they rely on majors.
What's the ugliest part of your body? Some say your nose, some say your toes, but I think it's your mind. -Zappa
Submitter's (?) blog references this, but here is Weird's Al's website where he actually talks about it ... his response on this topic is the 4th bold one down.
Hulk SMASH Celiac Disease
Even if Al is making less per song, does that mean anyone who bought one of his songs or records from iTunes would've otherwise purchased a brand new CD? Or might they have bought a used one, or none at all?
Nice to know that the distribution medium with essentially no production or distribution costs screws the artist in favor of the distributor.
I remember reading a UNDP report a while back on the development of countries in Africa. The researchers observed that the international market prices of commodities such as coffee or sugar were higher then than at any time in the past, and yet in the last few years the prices payed to the small farmers was at its lowest point in the past 60 years.
The reason for this apparent contradiction was the fact that small farmers can't sell their wares directly to the final consumer who brews coffee at home. Rather, this coffee is bought up by one of a handful of multinationals, who because they are so few, more or less dictate prices to the farmers, and then sell it on to the consumers. The fact that there are few of these middle men puts them in a position of power which allows them to make off with the king's share of the profits, and indeed they absorb the price hikes.
Maybe its time musicians got together and set up an electronic coop to sell their music the way farmers sometimes set up "farmers markets". They could have more control over their prices, and how much of what consumers pay goes to them.
Shouldn't the internet be making it easier to cut out the middle man like this?
Slashdot: news from nerds.
Actually, a lot of artists never got to sign for digital.
For example, with web/digital radio. RIAA bought off Congress so that they could collect royalties for all music played over webcasts. Guess what, my friend's band whom I'm the manager for...never got to negotiate.
RIAA is !@#$% up....
Im curious now if he's talking about the percentage he gets or if he's talking about volume. In other words, is he making less because people just buy the songs they want?
If it's the former, well the RIAA just plain sucks. (I'm sure this will be heavily covered before this topic is closed so I'm not going to bother being more eloquent.)
If it's the latter... sorry Al, I think you're talented and love your music, but that's supply and demand, man. If iTunes means a fairer price for all involved, then I'd ask you to take it in stride. The RIAA had quite the gold mine going there, and I don't blame them for trying to maintain it, but we legit customers were getting gouged.
"I like to lick butts!" by MobileTatsu-NJG (#32700246) (Score:5, Informative)
... and I don't feel sorry for him in the least.
I like Wierd Al, and even own a few of his CDs. But today, there is absolutely no reason for ANY musician to be beholden to a record company with a draconian contract that pays them practically nothing. The cost of recording equipment is a tiny fraction of what it was 20 years ago and the internet allows artists to sell their work directly to the public with no need for a record company to handle distrubution and take their 99.9% cut.
There is no reason why Wierd Al (or any other musician) can't record his music in his own studio, have the CDs pressed (there are companies out there that do it for $1 per CD) and then set up a website to sell the CDs as well as digital downloads. He gets 100% of the profits, we get to hear the music and the RIAA goes out of business.
CDs cost about $15-$20. The record label takes most of it, and the artist gets a little cut. iTunes CDs cost about $10. Apple gets a moderate cut (only about a third of what you pay), the record label still gets the lion's share, and there's even less of a smaller pie left for the artist. Apple benefits - they don't pay the costs associated with producing the music, their cut is enough to maintain the fairly high bandwidth and server costs to keep the service running and turn a small profit, all while selling more iPods. The record label benefits - they get less money, but still more than half the cost, and it costs them pretty much _nothing_ once they've handed over the digital music to Apple. Plus, a lot of people that buy iTunes music would have pirated otherwise, not paid for a full price CD. The artist, as always, gets screwed - artists have made *some* progress in increasing their share of CD sales, but when it was time to renegotiate to include iTunes sales, the record labels already owned existing artists' music, so it wasn't like the artists could back out and look for a better deal on the digital front.
Piracy is, in most people's opinions, the best option even before price is considered - much more convenient than going to a store or waiting for a CD to get mailed to you, wider selection and no DRM compared to iTMS and similar services... From right at home and in practically no time, one can acquire almost any piece of music and be listening to it, right from just about any internet-capable computer. Factor in free vs. rather overpriced, and it's pretty obvious why piracy is so popular.
So how can we support our favourite artists? For those who tour, the best method is probably to go to live concerts. Artists tend to get a bigger cut from tours than from CD sales, and going to shows gives you an experience you _can't_ replace with a better alternative for free. Put aside all the money you would have used to buy CDs and go to shows instead.
The only big problem left before the music industry can evolve to a more artist-centric process is the prohibitive cost of studio time / recording equipment. The digital age means that any artist can cheaply and easily distribute his/her music, once recorded, but most fledgling artists can't afford to record on good equipment. The one useful function (at least from a market perspective) record labels still serve is to select which artists get time in the expensive studios; there's not enough high-fi sound equipment for every high school garage band to record an album, and currently the labels are the deciding factor in who gets to record and who doesn't. There could certainly be better systems to decide this, but none are in place right now on a wide scale.
He's not the greedy one here.
This is a completely fucked up model. And what is sad is that the record labels have been doing this to artists for DECADES. Why is the only person in the loop that has creativity/talent/unique ability getting 5% of the money while all of the suits, lawyers, and management are sucking up 65%? I can understand some cost in production, but with modern technology you can do it for a few grand in software and hardware in your home.
iTunes/Apple is not the problem. The are just bringing to light the awful business practices of the record labels and the way they treat their slave labor....I mean artists.
"Trying is only the first step towards failure." - Homer
If you are going to say something like that, please actually read the article.
"Apple did work, and got paid for it. You did an arguably larger portion of the work, by creating something people wanted to buy in the first place, so Apple got a little money, and you got a good deal more."
He is saying here you did work, they sold your work, they take a cut and pass the rest back. Fair enough. However he goes on to say "Unfortunately, that's not how this version of the universe operates. So Apple sends the check to your record label."
And he then goes on to discuss where the money goes to the record label.
The conclusion he reaches is basically "If all of your fans bought through iTunes rather than buying CDs at the record store you'd be looking at an overall reduction in income of 85%!" however he is quite clear through the article that the record companies take a lions share of that money
Moving from fact into speculation, let's examine what's happening here
Case 1:
Man records songs, Record label puts work into creating CD labeling, packaging, promoting and so on. Record label organizes with Distribution company to sell CD's and gets money in return.
Cost of Final Product: $15-$20.
Case 2: Man records songs, Record label puts work into creating CD labeling, packaging, promoting and so on. Record label organizes with itunes to use all the fancy stuff they created for the CD and sell the product over Itunes.
Cost of Final Product: $0.99 * songs or $10, whichever is less
The same costs are involved in doing both. Until artists only release online, the CD cost will have to be recouped as well anyway, so it shouldn't be a huge shock to anyone that the cheaper product provides a worse return on investment for the same work.
Can't we all just get along
"But I don't think Weird Al is hurting for money..."
That matters because....?
"I like to lick butts!" by MobileTatsu-NJG (#32700246) (Score:5, Informative)
There are very few people who actually have any taste in music. The vast majority of music purchases are made by shleps buying whatever is on the radio or MTV. So who is on the radio or MTV?
Whoever the record labels SAY should be on the radio or MTV.
So, no reason to pay the artists anything - if the artist you're talking to doesn't want to take a small percentage of the record sales, then you just find somebody else who will, make THEM the star, and then they can rake it in on concert ticket sales.
People do not understand that pricing has NOTHING to do with what it costs to provide a service. It has to do with what people are willing to pay to get a service. And most new artists are willing to pay the vast majority of their record (or download) sales to have the services of a record label.
Also, the article is wrong about WHO is getting the artist's money. The money the artist isn't getting isn't going to the LABEL, it's going to the CONSUMER:
Price of Al's CD on Amazon: $14.98
Price of Al's CD on iTunes: $11.88
That's a difference of $3.10. Al 'apparently' loses $0.27 per song (not $0.265, article has rounding problems). $0.27 x 12 = $3.24!
So, when Al comes up short $3.24 because a consumer got an album for $3.24 less on iTuns than on Amazon, who got that $3.24?
The CONSUMER did!
Now, I'm not saying this is FAIR. Clearly, the record label is making much more money on iTunes sales since, as mentioned, they don't have to pay for a lot of things they would if they distributed music by physical CD. But... why should Al get any of that? Al has agreed to pay the record company a certain amount for the record company's services. The record company gets the same amount whether the CD is sold online or on the shelves. If Al doesn't want to lose money to his stuff being sold on iTunes, he should renegotiate his contract to not allow iTunes sales. I bet most artists wouldn't do that though, because they make most of their money on concerts, and being on iTunes helps them sell tickets.
The *REAL* problem here is not that Al isn't getting more money. The real problem is that the CONSUMER is still paying the record company CD distribution prices instead of digital distribution prices. In a free market, we would expect digital downloads to be much cheaper than $0.99, because the various distributors would compete against each other reduce the inflated margins the record companies (and iTunes) are getting based on CD priving. But since iTunes is a fairly insulated monopoly at this point, even though the CD *COSTS* of distribution have gone away, the CD *PRICING* hasn't.
So, who is REALLY at fault for the artist getting no money AND the record company and iTunes still getting full price?
APPLE! They've set the $0.99 price and are putting no pressure on the record labels to lower it.
paintball
I must say that from my own personal experience, Weird Al is a nice guy willing to watch out for his fans... I wrote him a letter once (when CD's were the rage) and asked him where I could purchase his albums, stating that I had a hard time finding them in local shops. He responded (or his lackeys, whatever- they refelct his attitude IMHO) thanking me for being a fan and shipped me ALL of his albums for free.
Some rare fan treatment if you ask me. Now, it may be that he makes much less on iTunes sales, but I'm sure he's not hurting- hopefully he remembers his bill-paying fans that make him what he is.
Wow! This must be a PERSONAL letter, just for me!
Al's not really complaining. Someone asked him what medium gets him the most money, and here's what he had to say:
He's a little sarcastic about it, but that IMO doesn't come close to "complaining".
Steve Vai said the same thing a couple of years ago: http://www.vai.com/AllAboutSteve/postcard_040220.h tml
Here's an excerpt about iTunes in particular:
For instance, If you go to Itunes and download a song for $.99, Apple retains about $.34 and the label receives about $.65. Labels then calculate a royalty base price to apply to the artists deal points. Following are some of the deductions:
a. A packaging fee (container cost) of up to, and sometimes more than, 25%. That's 25% of retail which is $.99 equaling about $.25 (by the way, there is no packaging on a digital download).
b. A 15% deduction for free goods. That's an additional $.15 or so. (There is usually no free goods with digital downloads unless someone is ripping it from the net.
That leaves a royalty base price of close to $.60 per track that the artists royalty is calculated against. If an artist receives 15 points in their deal (and remember, that's a very good deal) then he is entitled to aprox. $.09 a track. This is then cut in half because of the "new technology clause" that is incorporated into most deals. The artists royalty is then calced out at $.04-.05 a download and from that, 100% of it is withheld by the label to go towards recoupment of any advances to make the record, advances in general, tour support, radio promotion and other things in some cases. Most managers and producers are paid from record one and are paid regardless of the expenses, leaving the artists with even more of a recoupment burden before they start to see any income.
IOW, freakin' artist needs to be extremely lucky to see ANY of the money, ever, despite the fact that it's his work being sold. OTOH he may be able repay his debt to the label - this is something they won't be able to do if their stuff is sold through allofmp3.com.
Nope.
In fact, by even posting it on Slashdot, they've pretty much ensured that Weird Al would never make the song.
From the FAQ section of his site (http://www.weirdal.com/faq.htm):
"Can I send my song ideas to Al?
Sorry, for legal and personal reasons, Al does not accept song ideas from fans (he's got plenty warped ideas on his own!) You might try following in Al's footsteps by recording your songs and sending them to Dr. Demento - maybe you'll hear yourself on the radio!"
I've never met him, but I'm told that he's a really cool guy (a family member of mine who was working security at one of his shows talked to him for a bit). And of course, being the diehard fan that I am, I have quite a few of his albums.
-- Joe
Here's my experience as an indie artist.
I sell CDs through CDBaby, which gives me digital distribution through iTunes and other services. If you buy one of my tracks on iTunes (the store that pays me the most), I make between 59.1 and 63.7 cents, depending on the track. I'm not sure why one track pays more than another, but I notice that my best-selling track pays 63.7 cents. A full album download on iTunes gets me $6.37, after CDBaby takes their flat 9 percent cut.
That's not much different from what I get from my physical sales, but that's by choice. The deal with CDBaby is, I set my price as I wish, then they tack on their own $4 overhead. So I said I wanted $6.50 per CD, and my CD sells for $10.50.
Online sales also allow for tiny sales - if you stream my song on one of many services, for example, I might get a fraction of a cent or as much as four cents.
At any rate, for me, digital sale prices are merely out of my control - iTunes will charge what it wants, take a certain cut, let CDBaby take a certain cut, and I'll get the rest. On my physical sales, I can decide how much I want per CD, assuming I can find customers at the price I set.
[salesplug] If anybody wants to check me out on CDBaby, I'm at http://www.cdbaby.com/nathanlong [/salesplug]
I haven't seen this much excitement over Weird Al since Coolio released Gangstas Paradise.
Apparently, his sites servers haven't either.
Wanna fight ? Bend over, stick your head up your ass, and fight for air.
Why is Al even messing with this?
u th-recording-music-is-basically-free
1. It costs effectively nothing to record these days. Case in point: http://syriusjones.org/articles/2006/06/13/the-tr
2. It costs nearly nothing to distribute digitally (insert long tail reference here)
3. Marketing costs money...but wait, we've all heard of Weird Al, so he doesn't need much marketing anymore.
He should be doing this himself. Period.
UHF Rules!!!!
Exactly. If the artist submits his stuff directly to iTunes he can pocket the $.63 directly rather than giving it all to the label. Any wonder why the RIAA is nervous?
Find coupons in Greeley
Have you ever seen a record contract? I work in the recording industry and I have.
They are usually about 70-90 pages of small print which are "the result of the accumulation of thousands of lawsuits through the years".
These contracts are written to minimize liability for the label and obviously maximize return. However, there is always a "this contract applies to any current, future, or past medium of distribution, seen or unforeseen etc..." clause written in. It is up to the artist and his attorney to negotiate that out of the contract if they feel the need to.
Libertas in infinitum
If people don't like the price they can go without. That's your system is it? How about competition?
Um, I didn't say go without music. I'm saying go without the artists whose music you think is too expensive. Go with artists who are cheaper. Competition is there; artists compete with each other for fame and fortune. You have a choice between them, and you base your decision on (A) the quality of their music and (B) the price of their music. How is this any different from other industries where competition thrives? You might think that a Ferrari is a nicer car than a Toyota Camry, but you "can go without" the Ferrari because the Camry is cheaper.
If the record companies were required to license their songs to multiple manufacturers and you had a choice between which of them you bought the CD from you don't think the prices would be lower?
What would be the point of this? Record companies would simply license the songs at "high" prices, and then the CD manufacturers would pass the cost on to consumers.
I have discovered a truly remarkable proof of this theorem that this sig is too small to contain.
He's just lifted http://www.webpronews.com/topnews/topnews/wpn-60-2 0060428SonyBMGInDigitalMusicTrouble.html and replaced the 'Allman Brothers' with 'Weird Al'.
Artist royalties are generally standardised as a percentage of revenue that the label receives. If you're a big artist with some clout you can negotiate a better deal, but almost all artists will get a basic, low royalty deal. But it is based on record company revenues.
Of the couple of musicians I personally know with songs on iTunes and cds stocked in local stores, they firmly recommend that people buy through iTunes. This is solely because they will receive more money from each purchase - that is the lure with which labels have been drawn to iTunes. Weird Al might have negotiated himself a great deal for physical sales and a poor deal for digital, but on a basic / generic record contract the artist will assuredly get more from iTunes.
Weird Al is probably losing out on selling his filler tracks. On iTunes people often only buy a couple of tracks, rather than the full album. And that is truly the only way that an artist can lose on iTunes.
...they do put out some good albums.
"A great democracy must be progressive or it will soon cease to be a great democracy." --Theodore Roosevelt
But, here's my thing. Saying that a wildly successful artist (like Weird Al definitely is) is aggrieved by a distribution that, OMG, reduces the profit per sale of his songs, is like saying that professional baseball players are aggrieved when there is a absurdly high salary cap installed; yeah, its technically true in the sense that they aren't quite as filthy rich as before, but I won't weep that much for them.
OTOH, there are those artists, let us call them the 'filthy rabble (tm)' who aren't successful, and under normal circumstances wouldn't generate enough sales potential to justify to a record label the cost and risk of publishing their work. For these folks, an electronic distribution model is the only likely way for themto ever hope to get content to potential consumers.
Point the third, its not like sucessful artists don't have leverage when dealing with major labels. Volcano, which is Weird Al's label, was embroiled, for example, in a contarct dispute with Tool, another wildly successful band. Tool, after a protracted argument, prevailed in most of the ways that matter. Artists can leverage their potential future sales to benefit them in contract negotiations, and they do it all the time.
There is plenty to complain about in the music industry, and the RIAA and the labels on behalf of whom they lobby are in many ways foolish in their relatively unenlightened pursuit of bare self-interested greed, but this, I do believe, is not a good example of that trend. It is simply a successful artist going through the relatively painless 'pain' of adjusting to a new distribution paradigm. There are better thinsg to complain about (like pushing very short sighted DRM schemes that treat all customers like would-be criminals rather than treating them, oh I don't know, well). P.S., I like Weird Al's work; he's a hell of a satirist.
All the techniques ever used to make men moral have been themselves thoroughly immoral... (Nietzsche)