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

it's the opposite of trustworthy....

[User 956]

Gabriel believes that making the pricing information public would 'implicate [sic] very real antitrust concerns'

Well, if there's one thing record labels have an abundancy of, it's anti-trust.

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

[x3rc3s]

No matter how many more songs there are on a disc, an album is nearly always defined as containing 10 songs in a recording contract. And payment is based on that figure to the artist, which means the labels do a good deal better on CD sales than online downloads, though that doesn't account for materials costs I suspose.

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.

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

[kfg]

Do you know what a latte costs in the Caymans?!

Yeah, I understand it's pretty expensive there. I had a record company executive try to explain it to me once, but he used a lot of financial jargon, like "exchange rate" and "hooker," so I really didn't catch it all.

Then he walked away singing Titties and beer, titties and beer, titties and beer. . ."

And all this time I've been laboring under the impression that record company executives weren't particularly fond of Zappa.

KFG

Pain And Suffering

[SenorPez]

Even at the $0.70 per song mark, you have to consider damages for the pain and suffering of those poor, poor record executives. I mean, honestly: Think about the hours and hours that they spent in their mansions, lying awake on their double-king canopy beds, surrounded by sleeping hookers... and unable to sleep because of the massive injustice being done to their industry.

Or something like that.

In all honesty, it's a hard thing to nail down. If I work in a donut factory, there is SOMEONE, even if that person isn't me, who knows how much that donut costs to make, including materials, equipment, labor, shipping, and pesticides. When it comes to things like music, art, etc., how DO you quantify the cost of the artists' talents, the labels' marketing efforts, the RIAA's... something... etc. Even the most talented singer in the world is useless without distribution... and marketing and distribution channels can sometimes (Britney?) overcome a shallow pool of talent.

That being said, anything that comes out of the multi-mawed beast known as the RIAA is met with instant skepticism. When you spend years upon years intimidating people who may or may not have committed a crime, and many of those that are nominally guilty are in the "OMG, You ate a peanut out of the grocery store bin!" variety, it's hard to find any foothold of remorse in the market. So $0.70 wholesale price might be in the "ballpark." But I don't give a damn.

Artists pay for everything

[Namarrgon]

Quite true, and many more costs besides. The artists have to bear the entire cost of creating and selling the album, before they get any royalties.

Fair enough, you say? Perhaps - except they don't get to keep it. That album, that they conceived, wrote, performed, recorded, marketed and paid for in full, is no longer theirs. Copyright for the album is owned by the LABEL, and NOT the artist. That really sucks.

Time to link to Steve Vai's words of experience too, on this and the many other nefarious clauses that appear in a standard label contract.

RIAA to MAFIAA

[snowleopard10101]

RIAA's name should be changed to MAFIAA. MAFIAA: Music and Film Industry Association of America