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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?
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....
He's not the greedy one here.
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
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.
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]
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
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)