RIAA Accounting — How Labels Avoid Paying Musicians

An anonymous reader writes "Last week, we discussed Techdirt's tale of 'Hollywood Accounting,' which showed how movies like Harry Potter still officially 'lose' money with some simple accounting tricks. This week Techdirt is taking on RIAA accounting and demonstrating why most musicians — even multi-platinum recording stars — may never see a dime from their album sales. 'They make you a "loan" and then take the first 63% of any dollar you make, get to automatically increase the size of the "loan" by simply adding in all sorts of crazy expenses (did the exec bring in pizza at the recording session? that gets added on), and then tries to get the loan repaid out of what meager pittance they've left for you. Oh, and after all of that, the record label still owns the copyrights.' The average musician on a major record deal 'gets' about $23 per $1,000 made... and that $23 still never gets paid because it has to go to 'recouping' the loan... even though the label is taking $630 out of that $1,000, and not counting it towards the advance. Remember all this the next time a record label says they're trying to protect musicians' revenue."

Comments

Re:Anyone who is stupid enough to work with the RI

[nacturation]

Yeah, just like anyone who doesn't take the time to learn self-defense courses deserves to get beat up!

If you sign a contract to fight in the UFC and you don't know any self-defense, then it's not a question of what you deserve... you're going to get beat up.

If you sign a contract to have someone else pay for your music production, distribution, and promotion and you don't understand the contract you're signing that says they're loaning you money for all of that and they expect to get paid back, then it too is not a question of what you deserve... it's what you agreed to.

RIAA's shady practices totally justifies my theft!

[josath]

I feel much better about stealing music (sorry...I mean obtaining commercial artistic works for free via copyright infringement, since it's not theft, it's A-OK!) now that I know how bad the industry treats its artists. Stealing $1000 worth of MP3's really only causes $23 of damage to my favorite artists -- that lets me sleep much better at night. Thanks to the previous article, I already feel the same way about movies too. Hopefully someone comes on and publishes an article showing the same thing about video games and computer software as well, so I don't have to feel bad about pirating them either.