RIAA Admits 70 Cent Price is 'In the Range'

NewYorkCountryLawyer writes "In its professed battle to protect the 'confidentiality' of its 70-cents-per-download wholesale price, the RIAA has now publicly filed papers in UMG v. Lindor in which it admits that the 70-cents-per-download price claimed by the defendant is 'in the range'.(pdf) From the article: 'The pricing data really may not be all that secret. Late in 2005, former New York Attorney General (and current Governor) Eliot Spitzer launched an investigation into price fixing by the record labels, alleging collusion between the major labels in their dealings with the online music industry. Gabriel believes that making the pricing information public would 'implicate [sic] very real antitrust concerns' as the labels are not supposed to share contract information with one another ... Beckerman argues in a letter to the judge that the only reason the labels want to keep this information confidential is to 'serve their strategic objectives for other cases,' which he says does not rise to the legal threshold necessary for a protective order. The proposed order would force the labels to turn over contracts with their 12 largest customers. Most details--such as the identities of the parties--would be kept confidential, but pricing information and volume would not.'"

Comments

Pricing Comparison

[Ided]

If you take a step back and put this into perspective you are able to really get a clear picture of how much money this companies are making on a per track basis. If they are charging .70 to music retailers then consider the following: .99 = iTunes (cheaper if CD is purchased) .93 = CD of 15 songs priced at $16 I recently came across an article suggesting that artists on average get paid around .25 per song. This computes into an estimated profit of roughly .45 per song. Of course compute that into a couple of million songs sold for one major artist and you're looking at $900,000 in profit for the record company. Not to shabby for one major artist. The point being I still see plenty of reports of artists selling this many records on a regular basis. I would find it difficult to do much complaining about profit loss when I am bringing in something like that from one person. All the smaller artists you have can cover costs.

Re:Pricing Comparison

[SydShamino]

$0.45 per song sounds high, but if you think about all that they take care of (advertising, risk of producing your album (which if it's your first could be a total loser bringing in no money), etc.), it doesn't sound too rediculous.

As I understand it, the production and advertising costs are usually recouped from the artists before they get a cut. In other words, those costs come out of the artists' $0.25, not out of the label's $0.45.

Re:Pricing Comparison

[PopeRatzo]

The article you "came across" was dead wrong. From every dollar, the most an artist will get is 20 cents and that's only the top few percent of recording artists.

Do you know how much money MOST recording artists will make from every dollar in record sales? Less than 8 cents, and that's only after all the expenses of the recording, distribution and marketing are paid for. In fact, nearly 1/3 of all recording artists who make records that sell more than 1000 copies (to get past the cases where only family members buy the records), will make exactly NOTHING from record sales. You can't just accept the very highest percentage that the top-paid artists will receive as representative, but look at what the recording industry does as a whole. After all, it's not only the top percent of artists that bring in the greatest portion of the entertainment industry's profits.

And the back-catalog, that enormous cash-cow of the big record companies, generally pay nearly nothing to the original artists. The composer might make a few cents on the dollar, but only if they didn't relinquish their publishing, which is much more common for new bands than you would think.

There are better ways for artists to make a living, and for their work to be distributed to consumers. Many have already found them, thank you very much.

Re:Pricing Comparison

[nolife]

But how much of this "cost" is self induced by the record industry itself?
Payola, ticket master, law suits, lobbying, Harry Fox? (or who knows how many other licensing and reproductions agencies) and I'm sure there are many more.

The RIAA wants to only have to promote (or make successful) several different people per genre of music per year. That way they can concentrate the spending on those select few and get a better return on investment. There will always be a few new young good looking female pop singers to fill the void but there will NEVER be more then just a few regardless of the current talent pool. Music and entertainment in general thrives off of the bandwagon effect, not who is actually talented or not. Use Carrie Underwood as an example. She would not be making music right now if it was not for the in your face recognition she got from American Idol. There are 100's just like her that will never make it and it has nothing to do with lack of talent. The entire entertainment industry revolves around this concept. I blame this on human nature and the industry inner working itself. I view a politians rise to higher positions in a similar manner.

If you want variety, you will have to seek it out yourself in or out of the traditional RIAA sanctioned methods and not have it handed to you by the radio and television stations.

Re:Pricing Comparison

[trentblase]

Not that I support the way labels do business, but of course those expenses are taken from the artist's cut. Do you propose that the record labels promote/produce/etc. for free? Any fee they do charge comes out of the "artist's cut". And if the label spends all that money promoting/producing/etc. and it makes no money, those costs are NOT taken from the artist's cut (because they have no cut, the revenue being 0). It's not like the artist is then expected to get a day job and pay back the initial costs (well, maybe some seedy labels work this way, but they are more on the level of "agents" who convince you to buy expensive headshots).

Damages

[HappySqurriel]

If they only make $0.70 wouldn't that imply that for the damages of 1.5 trillion from AllOfMP3.com would only be justified if AllOfMP3.com had uploaded over 2 trillion copies of songs to their users?

Personally, I suspect that is the reason they wouldn't want their prices known; it destroys the RIAA's ability to sue for massive damages.

Re:Damages

[Sciros]

Well, nothing can really justify the claim that AllOfMP3.com is responsible for $1.65 trillion in damages. But I do agree that in general by making their profits more public they will have a tougher time making outrageous claims of losses to piracy.

Re:Damages

[qrwe]

AllOfMp3:s greatest strength is (in my own opinion) a solution for everyone to choose whatever the music they want in whatever format they want. (Yes, I've tried it..) For example: As I choose Vorbis when ripping my own CD:s and there's poorly of those iTunes-like stores out there offering this format, some people choose allofmp3 just for the opportunity. Plus, you pay only for how many kbps you want the track in. Conclusion: how possibly can anyone claim 0.70 USD for a lossy formatted track where you can't even choose exactly how you want it?

Re:Damages

[flyonthewall]

Out of curiosity, how is AllOfMP3 responsible? They operated within the laws of their country and paid the appropriate fees.

If the RIAA want their pound of flesh, would they not be better off going after the Russian licensing agency?

Re:Damages

[Jeff DeMaagd]

Conclusion: how possibly can anyone claim 0.70 USD for a lossy formatted track where you can't even choose exactly how you want it?

Let's be honest here, the only people that truly cares about these particular details are the nerd-types, and while we are at it, let's be honest enough to say that we are a minority. I would bet that if you approached ten people that you normally wouldn't associate with (or they wouldn't normally associate with you) and ask them what a "lossless" or "lossy" format is, nine or ten of them will say "huh?". In short, most people don't really care about that.

Re:Damages

[repvik]

Out of curiosity, how is AllOfMP3 responsible? They operated within the laws of their country and paid the appropriate fees.

They aren't

If the RIAA want their pound of flesh, would they not be better off going after the Russian licensing agency?

Yes. But since the RIAA is in the US of A, suing a "innocent" company in another country (with different laws) for ridiculous amounts just might work.

Re: Only Lawyers may even think about law!!!

[VidEdit]

Of course, only Lawyers may even think about law. Or at least that seems the logical extension of what you are suggesting by telling Slashdot that it should withhold any judgement on the RIAA until there is a firmly grounded case law on the matter. Well, that isn't going to happen anytime soon, or perhaps ever. Copyright law is nebulous and has been for a long time.

Of course Slashdot is not a lawyer, but it is silly to propose that only lawyers and judges can have a valid interest in, and discussion of, legal matters that affect all citizens. In fact many laws are actually written by people who aren't necessarily lawyers. These people who dare insert themselves in the legal arena without the requirement of having a law degree are called "legislators."

While it is true that the UMG_v_Lindor case gets a lot of mentions in Slashdot, it is also the case that it is one of the **only** cases out of the 20,000 or so RIAA lawsuits that is going to trial and where a tough litigator is trying to force the RIAA to back up its claims with more than just the thread of ruinously expensive legal action. It also doesn't hurt that the "Recording Industry vs. the People" blog site provides a rare blow by blow account of a legal action in progress which makes for an exciting, albeit slow, tale of one litigator standing up to a veritable army of corporate lawyers with nearly unlimited funds. The blog is an important way of trying to balance the playing field against an opponent with deep pockets and who will play every trick in or out of the book, full well knowing that they will probably avoid any accountability for their own actions.

Only Lawyers may even think about law!!! (WOOT)

[GodInHell]

Of course, only Lawyers may even think about law. Personally, as a lawyer-in-training, I fully endorse, support, and approve of this idea!! Can we legislate that? :) WOO HOO I'ma be rich mama! I'ma be rich!!

More seriously:

Of course Slashdot is not a lawyer, but it is silly to propose that only lawyers and judges can have a valid interest in, and discussion of, legal matters that affect all citizens. In fact many laws are actually written by people who aren't necessarily lawyers. These people who dare insert themselves in the legal arena without the requirement of having a law degree are called "legislators." It's also called "public debate," you know that funny thing that the 4th branch of gov't (aka the press) is supposed to engender. But in the modern clutter of divissive politics and the "nobody knows what to do but experts so STFU NEWB" culture that is evolving, we're running for trouble.

A great example of a wonderful U.S. legislator was Benjamin Franklin - He was also the U.S.'s key scientist and one of her great publishers of news and raw data. Technologist should adopt Franklin as their Patron of Thought - because the man delivered for engineering, science, philosophy, theology, and political science. The same brain that can brilliantly explain and master the formation of distributive processing and Wide Area Networks could do a great deal of good for this nation by injecting simple practical knowledge of what the internet, and the future hold in store for law and the U.S.

-GiH

Re:Different types of Damages

[bitt3n]

There is a difference between actual damages and statutory damages. Actual damages are an attempt to compensate the victim. Statutory damages are an attempt to include punitive damage in statute law. Whether or not this is wise law-making is debatable. I suspect that it would be better to force the victim to sue directly for punitive damages, thus leaving the matter to a judge to determine of the punishment fits the offense.

I've often wondered why punitive damages are given to the plaintiff, rather than, for example, funneled into law-enforcement programs (such as is presumably done with recovered drug money, etc.). The plaintiff is already getting compensatory damages. The purpose of the punitive damages is to punish the defendant. Why should the plaintiff get them? Maybe if he weren't to get them, we wouldn't have ridiculous trillion dollar (or even hundred million dollar) lawsuits.

Re:Pain And Suffering

[meta-monkey]

Now, Labels exploit artists they do not help them.

This depends on the artist. There are an awful lot of pop-idiots, like Britney Spears and Justin Timberlake, who, without the mass-market power of their record labels and publicists would be improverished and completely unknown, and deservedly so. I hardly think these characters are furious with their labels for turning their pretty faces and marginal talents into millions upon millions of dollars. It's the poor schmucks with talent but no marketing savvy, struggling to get by, who sign themselves over to 5 record deals so they can get some radio play that get exploited by their labels.

Why the [sic]?

[h4x0r-3l337]

Gabriel believes that making the pricing information public would 'implicate [sic] very real antitrust concerns' as the labels are not supposed to share contract information with one another

Why is there a "[sic]" in there? That is in fact how you spell the word, and it is used correctly in that context (having the meaning "imply" or "entail").

Re:There's that free market stuff again.

[Technician]

And without regulation, Napster would've replaced one cartel with another long ago.

Along with Beareshare, Limewire, Kazza, AllofMP3, Yahoo, Google... It would no longer be a monopoly run by a cartel.

Re:Artists pay for everything

[KoshClassic]

Not only that, but the record companies often cook the books - which means that the artists have to hire outside auditors at their own expense to try and recoupe royalties from the sales that the record company claims never happened, but also from inflated promotional expenses that come out of the artists cut. Then they usually settle with the record companies for pennies on the dollar. That's the record companies for you - they are supposedly looking out for the artists interest whle at the same time engaging in this sort of practice.

The top 5 record companies are all far larger than any of their other competitors. That these companies cooperate in any way - like by forming the RIAA - ought to be a huge anti-trust violation.

Re:Different types of Damages

[bill_mcgonigle]

I've often wondered why punitive damages are given to the plaintiff,

Because their lawyers get a third and lawyers write the laws.