If you paint the world's most beautiful painting and you sell it for $1MM, you have earned that million. If you somehow manage to sell a million chunks of dried rat turd for a buck a piece, you've still earned a million bucks. And if you have a million dollars in the bank, you have the right to buy a $1,000 suit, to give $1,000 to a homeless puerson, or light ten $100 bills on fire. It's a free market economy.
"That said, I love this idea. Do actors and musicians really need millions to live on? No. $40,000 a year should be enough for most of them. Live with one car! One house! Don't buy $1,000 suits! Live like a normal American! You don't NEED to be rich to have a good life!"
The sad thing is that many people who are in favor of this idea seem to be driven by jealousy.
I don't begrudge anybody who's successful, as long as they've done it legally and ethically. If somebody's managed to sell a million copies of a CD filled with music that I personally find to be terrible, or gets a million people to see their terrible film or read their awful book, I'm not bothered much. It's differences in artistic taste that make our society such an interesting place, and if somebody can get a million people to buy anything, then God bless 'em. They deserve it.
Another thing I like about our society is the notion that if you get the right education and make the right choices, you have the ability to make a lot of money. I'm not about to say that any class of people only "deserve" a certain level of income, and I certainly wouldn't anybody saying it about people in my profession. And the rationalization that any artist who would be uppity enough to want to make more than $40K a year isn't a true artist is absolutely bogus.
By the way, if you've read the article and $40K a year sounds like a lot of money to you, it's not. As you get older and you start taking on responsibilities, you need more money. Characterizing somebody who makes more than $40K a year as somebody who wears "$1,000.00 suits" is another dangerous mistake. Making more than $40K a year also allows you to have children, to feed and clothe them, to spend money on the arts, and to hopefully leave something for them when you pass on.
"Well, I can say that in their current position, it looks like record companies can ensure that online music distribution never becomes the main distribution medium."
Just as auto manufacturers want to sell cars, record companies want to sell music. A sale is a sale. Online sales have one huge advantage: no physical goods. That means no inventory, no shipping, no price protections, no returns. "Starving Apple of money" would also mean cutting off their own sales.
"They are the ones setting the prices at which the music must be sold."
Correct, as in all industries. If you are a reseller of widgets, the lowest price at which you can sell them is in part determined by your cost from the widget manufacturer or distributor.
"Apple will never become the primary provider of content if they have to compete with the record companies on their terms."
Apple is a reseller of music. Napster is their competitor, not the record companies. Whether you sell online music, or sell CDs via a web site, or sell them in a store in a mall, or whether you sell clothing or cars or fresh produce, retail is a tough business with lots of competitors and often razor-thin margins.
Online music sales are exploding, and (per Neilsen, at least) Kazaa usage is dropping off. Things are finally working out for them and this may be the end of their sales slump. There would be little percentage in record companies deliberately killing the online music sales industry.
"Once people start looking to places like the iTMS to discover music, the relative promotional clout of the RIAA will grow less, and they'll have to change their focus to stay in the business."
The RIAA is a trade group representing the interests of record labels. They don't do promotion of bands... that's the job of the record labels. The labels have already begun promoting their artist' music on the online services, just as they have have always done through the traditional sales channel.
Putting your work on the download services through an indie label without the marketing money of one of the Big Five, or distributing it on your own, will still put you at the same disadvantage you have with other sales channels: if your music is good, you'll get word of mouth sales, but you'll probably still sell less than the artists that the bigger record companies are promoting.
Well, it is an old business model. You pay your money to a reseller and get a product. Steve Jobs would probably agree. Many/.ers are heralding iTMS and other download services as a way to put the record companies out of business, but they're just another sales channel to them.
"I am surprised that no one yet has pointed out the ramifications of Jobs' revelation: a loss leader is an anti-competitive practice --it's actually illegal in a few countries, although nowhere in the US AFAIK."
It's already been pointed out that it's not a loss leader, but I should also point out that we don't know what Apple's startup costs have been compared to other online services. Their ad spend certainly seems to be dwarfing that of Napster, so that alone may make it harder for Apple to be profitable. "If Apple can't make a profit, nobody can" may not be a fair statement.
But, the mention of loss-leaders being anti-competitive brings up a related detail:
A few years ago Best Buy, Walmart and others started selling CDs at a loss (or, at least, at sub-standard margins) in order to bring people into the store.
Lots of little retailers complained to the record companies, saying "Hey... Best Buy and Walmart are being anti-competitive! We can't afford to sell CDs that low!"
The record companies started setting MAPs (minimum advertised prices) for their new releases to help level the field for the little guys. This meant that the retailers could sell the CDs for $11.99, but not advertise them, which, the theory holds, pulls fewer people into the store.
As a result, the record companies got nailed for price fixing.
"Now it's Apple who will be deciding what inducers and superlatives and featured artists get splashed across the showroom floors."
Huh? The "featured artists" you're seeing on the legal download services are co-op ads, just like the ad you might see run by a record store in a newspaper. The record companies still actively promote their artists. That is their job.
Likewise, the ads for music, software, books and DVDs you see on the Amazon home page are paid for by the manufacturers of the items. iTMS, like Amazon or a record store, may feature "editorial picks" or "staff recommendations," but generally speaking, if you see a particular product advertised by a retailer, the manufacturer has played a part in this.
An important function of record companies is to promote their artists in the sales channel. They do this whether the sales channel is a brick-and-mortar establishment like HMV, a web site like Amazon, or a download service like iTMS or Napster.
"I really do feel bad for the RIAA members (not the RIAA itself). They are stuck having to eventually face the fact that they are 80% of the way to extinction. Can anyone realy imagine a future 50 years down the road where anyone is interested in buying a piece of plastic with music on it?"
The fallacy here is that a record company's sole purpose is to manufacture plastic. This is the job of a CD replication house, not a record company.
The recording industry has survived many media changes in the past century -- from wax cylinders, to 78's, to LPs and 45s, cassettes, 8-tracks, and most recently, to compact discs. I think they'll survive the move to online distribution. Perhaps CD replication plants may see reduced business going forward, but the CD replication is just a small part of the cycle.
Remember, a record company's primary function is to provide the resources necessary to produce, promote and distribute music into the sales channel. So what if the sales channel changes from brick-and-mortar retail stores selling hard goods to online purveyors like iTMS, Napster and (now) MTV? This might actually be a good thing for the record companies. As anybody who's run a business knows, inventory management is a huge issue. Returns, price protections, shipping costs -- it's all a tremendous pain in the ass and it costs money... and that cost are reflected in the retail price.
The far more important purpose that record companies serve is providing the resources to get the music produced in the first place, and promoting that music so that people actually know that it exists. The record companies make a tremendous cash investment in the course of doing so, and they recoup their investment off of sales of the music -- whether it's online or on a CD.
I can guess the argument here -- "with the wonderful power of the Internet, I can record music on my home studio, make my own deal with iTMS, borrow money from my rich uncle and go in deep on my credit cards to advertise and promote my music so people can find it, and I'll become rich! Who needs the record companies when I can do all my production, promotionm advertising and retailing myself!"
The problems with this, as somebody put it the other day, is that generally a CD recorded in your bedroom for $20,000 sounds like a CD recorded in your bedroom. And effectively promoting your own stuff is hard work and costs money. Many artists simply do not have the resources, skills or even desire to be businesspeople.
"The RIAA would have you beleive it's because of the "horrors of piracy." But might it be because the economy as a whole is doing poorly? So people are less likely to buy entertainment?"
That's probably part of it, but CD sales have declined at a much steeper rate than most other forms of entertainment (movies, amusement parks, cock fights, etc). You're correct that the weak economy may be driving more people to Kazaa than might have gone there if there were more money to go around, but a poor economy doesn't make copyright violation different from a moral perspective.
"Or maybe CD prices (on average, as there are some exceptions) went up again?"
Doubtful. Music is about as cheap as it's ever been when inflation is taken to account. Sure, it was great back in 1984 when I was able to get LPs on sale for $9.99, but that's $17.32 in 2002 dollars. I can go to Best Buy today and buy CDs on sale for $12.99.
"Or maybe it's just because the RIAA keeps putting out crappy music that no one wants to listen to?"
The RIAA is a trade group representing the interests of record companies. Any record company is free to join the RIAA, regardless of if they specialize in good music, or crappy music.
Either way, this is another "nostalgia ain't what it used to be" issue like the issue of CD prices. The quality-to-crap ratio has always been low. We tend to forget this: when we think of the 70's we might recall "Dark Side of the Moon" or "The Long Run" and wonder out loud how music has gotten so bad lately, but there was a lot of crappy music foisted upon us by the big record labels, even back then. We've just forgotten it.
"That is not true. Just ask anyone in internet radio. Even non member bands are "considered",for legal and royalty purposes, to be RIAA members. This is part of US law."
Do you have a citation for this? I've read Title 17 many times and have never seen "RIAA" mentioned.
Huh? Because you know somebody who's completed a track for less than $50K, my argument is "100% BS?" It was an example, folks, and despite anecdotal examples of spending more or less, the fact remains that many albums have cost tens or hundreds of thousands to produce. This isn't a fact that you or I can change.
Do you have a citation for the report that iTMS pays indie artists 90%? If so, that's great news.
You're also correct that many ten-song CDs have been completed in just a couple of weeks. Then there are CDs like Dark Side of the Moon which took considerably longer. "Just start taking less time to make CDs" is also over-simplifying it.
With the vast variation in musical genres, speeds at which people work, and many other variables, I don't think there's a universal standard to which everybody should be held lest they be labelled "out of control." It may just so happen that the sort of music you prefer is the type that can be produced in a short amount of time and with minimal expense, and that's perfectly fine, but at the same time, you'll recognize that it's not everybody's preference. Music costs what it costs to make, and I don't think there are any rights or wrongs here.
"A certain percentage goes to the credit card companies, some to Apple, some to the RIAA (if you think they're not getting anything out of it think again)"
For us slower people, can you please explain how the RIAA gets a percentage of each sale?
The record company (which fronted the tens or hundreds of thousands of dollars necessary to produce the music) gets a sizeable chunk. That's how they recoup their costs -- by selling music. And, the record company may be a member of the RIAA, so the dues that the record company pays are derived from its income. But that's stretching it to the point of being misleading. Saying that the RIAA gets a percentage of each online music sale is like saying that the janitorial company that cleans the record company's office gets a percentage of each sale, as the record company pays them, too. You're stating it as if Apple pays a tithe to the RIAA for the benefit of existing, but that's not true.
Costs can vary widely. Bruce Springsteen once recorded an entire album in his kitchen on a Tascam Portastudio. Yet union session musicians can cost several hundreds of dollars a day, as can a good producer and a good engineer. Studio rental costs can vary widely, as well, depending on type and quality of the equipment, the area in which it's located, and the skills and experience of the staff.
It's a free market economy, and generally speaking, you get what you pay for. If you know the secret to charging $100 a day and delivering the same start-to-finish quality as a studio that charges $2,000.00 a day, then that's what you should be doing. "Just stop charging so much for studio time" and other simple bromides are not the solution.
"Most importantly: they still do not give all musicians a fair deal! ie.) at most 10-15% of sales for the typical signed artist, according to most reports."
And a sizeable chunk of it goes to the record company, which invested tens or even hundreds of thousands of dollars into the CD's production.
Lots of people's hard work goes into the production of a typical CD of music. I'm not just referring to suits, but creative, talented people who sweated over an instrument, a mixing board, or a Mac and a Wacom tablet because they love music. In most cases, the artist did not front all of the substantial amount of money required to produce the CD. That's the record company's job, and the record company stays in business by recouping expenses when the music is sold.
"Artists directly receive at least 75% of the sales and are allowed to set their own per-track or per-album prices to remain competitive."
So 75% goes to the artist (for your sake I'll include compulsories and mechanicals here, which are normally not calculated as part of an artist's compensation), another 6% goes to the credit card company for the transaction processing, and let's say 9% goes to Apple to cover the software development, bandwidth, technical support, and so on. This leaves ten cents per track for the record company.
If the track cost $50,000.00 to produce (remember, studio time can be upwards of $500,000.00 for an entire album nowadays), this means that the track would have to be downloaded a half a million times just to break even. That's half a million paid downloads, not counting Kazaa's share, for which the artist and the record company get nothing. While the superstars might expect half a million paid downloads over a reasonable amount of time, most artists -- those ones who are just getting by -- just aren't going to see that traffic in any decent period of time.
By the way, I run my own online business. I call the shots, and I've put a lot of work into it. The business wouldn't be around were it not for the software I've written myself. I don't deal with hard goods and my expenses are low. Yet I don't make anything close to the 75% net margin that you say that musicians should get. Most people don't. Your expectation that musicians should get 75% net margin is unrealistic.
This delves into the realm of consumer psychographics. With any retail business, it's the mix of product and price that defines the customer base and, ultimately, the retailer's success. In your case, you might shop at Amazon purely due to price, and if the prices on Amazon were the same as at traditional retailers, you wouldn't use it. For other consumers, convenience may override price and they might shop at Amazon even if prices were 10% more than at their local retail. No right or wrong reasons here. For yet other consumers, it may be because Amazon stocks items that they simply can't get in their local market. No right or wrong answers here.
Additionally, Googling on "criminal copyright infringement" will deliver links to data on criminal cases where copyright infringers have done jail time.
It's the convenience factor, of course. Many things are a little cheaper if you're willing to get in your car and wear out a little shoe leather. The fact that it's often a pain to drive to the mall, the CD store, the florist, etc. is a major force that drives e-commerce.
In my case specifically, I've bought lots of tracks from iTMS which are on albums that I would never spend the money to buy as a whole. So, for me, it's been a money saver.
Huh? Even that link, with all of its misinformation, correctly states that the money for the sale goes to the record label, not the RIAA.
In case I wasn't clear before... I've seen all these "a lot of the $0.99 goes to the RIAA!" statements going around, when it seems to be established that it goes to the record label -- you know, the outfit that put up tens or hundreds of thousands of dollars to cover the expenses of producing the music. Not the RIAA.
The record label and the RIAA are separate entities. The RIAA is a trade group which the record company may or may not be a member of. If I belong to the Automobile Association of America and you buy my old car from me, your money went to me -- not the AAA.
"ey are selling songs for 99 cents a piece, nearly all of which the RIAA is taking back."
Important clarification: the bulk of the $0.99 goes to the record company. That record company may be a dues-paying member of the RIAA so it can be said that the money's going to the RIAA in the same way that it can be said that the money is going to the janitorial company that the record label hires to clean their offices.
Also remember that it is the record company that invested a hell of a lot of money to have the record made. A finished CD is the result of the hard work of lots of creative people who earn their living this way -- I'm not just talking about suits, but creative people who play an instrument or sweat over a mixing board or a Mac and a Wacom tablet because they love music. These people are paid by the record company, and the record company attempts to recoup its investment by selling the recording.
If you expect the record companies to sell to the online services at a loss -- it's not going to happen. Just as you would not knowingly enter into a deal where you weren't making a profit down the road, neither would a record company or any other business on the planet.
"It looks like people do want to pay for their music... if only you'd damn well make it reasonably attractive for them to do so."
In case it wasn't clear, iTunes would not exist if it weren't for the cooperation of record companies. To put a song online legally, you need permission from all the rightsholders, and the record label typically owns or co-owns the rights to the recording itself.
The record companies are behind the online services and want them to succeed just as much as you do.
How is the RIAA a monopoly? They're a trade organization representing record companies. There are hundreds if not thousands of record companies in the USA alone. Anybody can start a record company (or an online music distribution company, if they'd rather not deal with hard goods), and whether they choose to join the RIAA is up to them.
If you're an unsigned performer or band, you can try to get signed by a big, huge, successful record company which might want to pay you less per CD and might drop you at any moment. Or, you can sign up with a small indie label, perhaps get paid more per CD, and enjoy greater security but fewer sales. This "big vs. small" choice is how many things work. Work for Microsoft, or join a small code shop? Big university with the prestigious name, or small school where you'll really get to grow? The choice is yours. This is a tough decision to make, but it's not due to a monopoly.
If you want to cry "monopoly," a better target might be Clear Channel, which (as you know, I'm sure) owns far too many radio stations for its own good and thus is a major force in what people get to hear. But, Clear Channel != the RIAA.
You're correct on all three points and you've given a very astute description on why possession of copyrighted material without the owner's permission is not automatically against the law.
I apologize; I interpreted your "Is it because...?" question not as an honest request for somebody to tell you if it was correct or not, but as a way of conveying information as part of the question. I've seen that tactic before; it's called "begging the question" in rhetorical circles (although that term is widely misused). I thought you were begging the question. Here's more info on that tactic. Again, if you did not intend to beg the question, I apologize.
To give you a more direct answer to your question, then, the RIAA, like most entities, wants to act as efficiently as possible. It's a lot easier to take civil action in the form of a hailstorm of subpoenas than to try to arrange criminal prosecution of the same number of people.
I was going to point out the NET act to answer your other question but it looks like somebody beat me too it. For what it's worth, although the NET act is currently being applied to music pirates, one of its original intents was to close the loophole used by software pirates who were providing free warez FTP sites.
Also for what it's worth, sadly, I have read the material carefully. However I acknowledge how that "private financial gain" can easily trip up people who aren't familiar with the NET act and its implications.
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"You have a very strange definition of the word "earned"."
Actually, he's right on the money.
If you paint the world's most beautiful painting and you sell it for $1MM, you have earned that million. If you somehow manage to sell a million chunks of dried rat turd for a buck a piece, you've still earned a million bucks. And if you have a million dollars in the bank, you have the right to buy a $1,000 suit, to give $1,000 to a homeless puerson, or light ten $100 bills on fire. It's a free market economy.
"That said, I love this idea. Do actors and musicians really need millions to live on? No. $40,000 a year should be enough for most of them. Live with one car! One house! Don't buy $1,000 suits! Live like a normal American! You don't NEED to be rich to have a good life!"
The sad thing is that many people who are in favor of this idea seem to be driven by jealousy.
I don't begrudge anybody who's successful, as long as they've done it legally and ethically. If somebody's managed to sell a million copies of a CD filled with music that I personally find to be terrible, or gets a million people to see their terrible film or read their awful book, I'm not bothered much. It's differences in artistic taste that make our society such an interesting place, and if somebody can get a million people to buy anything, then God bless 'em. They deserve it.
Another thing I like about our society is the notion that if you get the right education and make the right choices, you have the ability to make a lot of money. I'm not about to say that any class of people only "deserve" a certain level of income, and I certainly wouldn't anybody saying it about people in my profession. And the rationalization that any artist who would be uppity enough to want to make more than $40K a year isn't a true artist is absolutely bogus.
By the way, if you've read the article and $40K a year sounds like a lot of money to you, it's not. As you get older and you start taking on responsibilities, you need more money. Characterizing somebody who makes more than $40K a year as somebody who wears "$1,000.00 suits" is another dangerous mistake. Making more than $40K a year also allows you to have children, to feed and clothe them, to spend money on the arts, and to hopefully leave something for them when you pass on.
"Well, I can say that in their current position, it looks like record companies can ensure that online music distribution never becomes the main distribution medium."
Just as auto manufacturers want to sell cars, record companies want to sell music. A sale is a sale. Online sales have one huge advantage: no physical goods. That means no inventory, no shipping, no price protections, no returns. "Starving Apple of money" would also mean cutting off their own sales.
"They are the ones setting the prices at which the music must be sold."
Correct, as in all industries. If you are a reseller of widgets, the lowest price at which you can sell them is in part determined by your cost from the widget manufacturer or distributor.
"Apple will never become the primary provider of content if they have to compete with the record companies on their terms."
Apple is a reseller of music. Napster is their competitor, not the record companies. Whether you sell online music, or sell CDs via a web site, or sell them in a store in a mall, or whether you sell clothing or cars or fresh produce, retail is a tough business with lots of competitors and often razor-thin margins.
Online music sales are exploding, and (per Neilsen, at least) Kazaa usage is dropping off. Things are finally working out for them and this may be the end of their sales slump. There would be little percentage in record companies deliberately killing the online music sales industry.
"Once people start looking to places like the iTMS to discover music, the relative promotional clout of the RIAA will grow less, and they'll have to change their focus to stay in the business."
The RIAA is a trade group representing the interests of record labels. They don't do promotion of bands... that's the job of the record labels. The labels have already begun promoting their artist' music on the online services, just as they have have always done through the traditional sales channel.
Putting your work on the download services through an indie label without the marketing money of one of the Big Five, or distributing it on your own, will still put you at the same disadvantage you have with other sales channels: if your music is good, you'll get word of mouth sales, but you'll probably still sell less than the artists that the bigger record companies are promoting.
Well, it is an old business model. You pay your money to a reseller and get a product. Steve Jobs would probably agree. Many /.ers are heralding iTMS and other download services as a way to put the record companies out of business, but they're just another sales channel to them.
"I am surprised that no one yet has pointed out the ramifications of Jobs' revelation: a loss leader is an anti-competitive practice --it's actually illegal in a few countries, although nowhere in the US AFAIK."
It's already been pointed out that it's not a loss leader, but I should also point out that we don't know what Apple's startup costs have been compared to other online services. Their ad spend certainly seems to be dwarfing that of Napster, so that alone may make it harder for Apple to be profitable. "If Apple can't make a profit, nobody can" may not be a fair statement.
But, the mention of loss-leaders being anti-competitive brings up a related detail:
- A few years ago Best Buy, Walmart and others started selling CDs at a loss (or, at least, at sub-standard margins) in order to bring people into the store.
- Lots of little retailers complained to the record companies, saying "Hey... Best Buy and Walmart are being anti-competitive! We can't afford to sell CDs that low!"
- The record companies started setting MAPs (minimum advertised prices) for their new releases to help level the field for the little guys. This meant that the retailers could sell the CDs for $11.99, but not advertise them, which, the theory holds, pulls fewer people into the store.
- As a result, the record companies got nailed for price fixing.
It sucks to be in business."Now it's Apple who will be deciding what inducers and superlatives and featured artists get splashed across the showroom floors."
Huh? The "featured artists" you're seeing on the legal download services are co-op ads, just like the ad you might see run by a record store in a newspaper. The record companies still actively promote their artists. That is their job.
Likewise, the ads for music, software, books and DVDs you see on the Amazon home page are paid for by the manufacturers of the items. iTMS, like Amazon or a record store, may feature "editorial picks" or "staff recommendations," but generally speaking, if you see a particular product advertised by a retailer, the manufacturer has played a part in this.
An important function of record companies is to promote their artists in the sales channel. They do this whether the sales channel is a brick-and-mortar establishment like HMV, a web site like Amazon, or a download service like iTMS or Napster.
"I really do feel bad for the RIAA members (not the RIAA itself). They are stuck having to eventually face the fact that they are 80% of the way to extinction. Can anyone realy imagine a future 50 years down the road where anyone is interested in buying a piece of plastic with music on it?"
The fallacy here is that a record company's sole purpose is to manufacture plastic. This is the job of a CD replication house, not a record company.
The recording industry has survived many media changes in the past century -- from wax cylinders, to 78's, to LPs and 45s, cassettes, 8-tracks, and most recently, to compact discs. I think they'll survive the move to online distribution. Perhaps CD replication plants may see reduced business going forward, but the CD replication is just a small part of the cycle.
Remember, a record company's primary function is to provide the resources necessary to produce, promote and distribute music into the sales channel. So what if the sales channel changes from brick-and-mortar retail stores selling hard goods to online purveyors like iTMS, Napster and (now) MTV? This might actually be a good thing for the record companies. As anybody who's run a business knows, inventory management is a huge issue. Returns, price protections, shipping costs -- it's all a tremendous pain in the ass and it costs money... and that cost are reflected in the retail price.
The far more important purpose that record companies serve is providing the resources to get the music produced in the first place, and promoting that music so that people actually know that it exists. The record companies make a tremendous cash investment in the course of doing so, and they recoup their investment off of sales of the music -- whether it's online or on a CD.
I can guess the argument here -- "with the wonderful power of the Internet, I can record music on my home studio, make my own deal with iTMS, borrow money from my rich uncle and go in deep on my credit cards to advertise and promote my music so people can find it, and I'll become rich! Who needs the record companies when I can do all my production, promotionm advertising and retailing myself!"
The problems with this, as somebody put it the other day, is that generally a CD recorded in your bedroom for $20,000 sounds like a CD recorded in your bedroom. And effectively promoting your own stuff is hard work and costs money. Many artists simply do not have the resources, skills or even desire to be businesspeople.
"The RIAA would have you beleive it's because of the "horrors of piracy." But might it be because the economy as a whole is doing poorly? So people are less likely to buy entertainment?"
That's probably part of it, but CD sales have declined at a much steeper rate than most other forms of entertainment (movies, amusement parks, cock fights, etc). You're correct that the weak economy may be driving more people to Kazaa than might have gone there if there were more money to go around, but a poor economy doesn't make copyright violation different from a moral perspective.
"Or maybe CD prices (on average, as there are some exceptions) went up again?"
Doubtful. Music is about as cheap as it's ever been when inflation is taken to account. Sure, it was great back in 1984 when I was able to get LPs on sale for $9.99, but that's $17.32 in 2002 dollars. I can go to Best Buy today and buy CDs on sale for $12.99.
"Or maybe it's just because the RIAA keeps putting out crappy music that no one wants to listen to?"
The RIAA is a trade group representing the interests of record companies. Any record company is free to join the RIAA, regardless of if they specialize in good music, or crappy music.
Either way, this is another "nostalgia ain't what it used to be" issue like the issue of CD prices. The quality-to-crap ratio has always been low. We tend to forget this: when we think of the 70's we might recall "Dark Side of the Moon" or "The Long Run" and wonder out loud how music has gotten so bad lately, but there was a lot of crappy music foisted upon us by the big record labels, even back then. We've just forgotten it.
"That is not true. Just ask anyone in internet radio. Even non member bands are "considered" ,for legal and royalty purposes, to be RIAA members. This is part of US law."
Do you have a citation for this? I've read Title 17 many times and have never seen "RIAA" mentioned.
Huh? Because you know somebody who's completed a track for less than $50K, my argument is "100% BS?" It was an example, folks, and despite anecdotal examples of spending more or less, the fact remains that many albums have cost tens or hundreds of thousands to produce. This isn't a fact that you or I can change.
Do you have a citation for the report that iTMS pays indie artists 90%? If so, that's great news.
You're also correct that many ten-song CDs have been completed in just a couple of weeks. Then there are CDs like Dark Side of the Moon which took considerably longer. "Just start taking less time to make CDs" is also over-simplifying it.
With the vast variation in musical genres, speeds at which people work, and many other variables, I don't think there's a universal standard to which everybody should be held lest they be labelled "out of control." It may just so happen that the sort of music you prefer is the type that can be produced in a short amount of time and with minimal expense, and that's perfectly fine, but at the same time, you'll recognize that it's not everybody's preference. Music costs what it costs to make, and I don't think there are any rights or wrongs here.
"A certain percentage goes to the credit card companies, some to Apple, some to the RIAA (if you think they're not getting anything out of it think again)"
For us slower people, can you please explain how the RIAA gets a percentage of each sale?
The record company (which fronted the tens or hundreds of thousands of dollars necessary to produce the music) gets a sizeable chunk. That's how they recoup their costs -- by selling music. And, the record company may be a member of the RIAA, so the dues that the record company pays are derived from its income. But that's stretching it to the point of being misleading. Saying that the RIAA gets a percentage of each online music sale is like saying that the janitorial company that cleans the record company's office gets a percentage of each sale, as the record company pays them, too. You're stating it as if Apple pays a tithe to the RIAA for the benefit of existing, but that's not true.
Costs can vary widely. Bruce Springsteen once recorded an entire album in his kitchen on a Tascam Portastudio. Yet union session musicians can cost several hundreds of dollars a day, as can a good producer and a good engineer. Studio rental costs can vary widely, as well, depending on type and quality of the equipment, the area in which it's located, and the skills and experience of the staff.
It's a free market economy, and generally speaking, you get what you pay for. If you know the secret to charging $100 a day and delivering the same start-to-finish quality as a studio that charges $2,000.00 a day, then that's what you should be doing. "Just stop charging so much for studio time" and other simple bromides are not the solution.
"Most importantly: they still do not give all musicians a fair deal! ie.) at most 10-15% of sales for the typical signed artist, according to most reports."
And a sizeable chunk of it goes to the record company, which invested tens or even hundreds of thousands of dollars into the CD's production.
Lots of people's hard work goes into the production of a typical CD of music. I'm not just referring to suits, but creative, talented people who sweated over an instrument, a mixing board, or a Mac and a Wacom tablet because they love music. In most cases, the artist did not front all of the substantial amount of money required to produce the CD. That's the record company's job, and the record company stays in business by recouping expenses when the music is sold.
"Artists directly receive at least 75% of the sales and are allowed to set their own per-track or per-album prices to remain competitive."
So 75% goes to the artist (for your sake I'll include compulsories and mechanicals here, which are normally not calculated as part of an artist's compensation), another 6% goes to the credit card company for the transaction processing, and let's say 9% goes to Apple to cover the software development, bandwidth, technical support, and so on. This leaves ten cents per track for the record company.
If the track cost $50,000.00 to produce (remember, studio time can be upwards of $500,000.00 for an entire album nowadays), this means that the track would have to be downloaded a half a million times just to break even. That's half a million paid downloads, not counting Kazaa's share, for which the artist and the record company get nothing. While the superstars might expect half a million paid downloads over a reasonable amount of time, most artists -- those ones who are just getting by -- just aren't going to see that traffic in any decent period of time.
By the way, I run my own online business. I call the shots, and I've put a lot of work into it. The business wouldn't be around were it not for the software I've written myself. I don't deal with hard goods and my expenses are low. Yet I don't make anything close to the 75% net margin that you say that musicians should get. Most people don't. Your expectation that musicians should get 75% net margin is unrealistic.
This delves into the realm of consumer psychographics. With any retail business, it's the mix of product and price that defines the customer base and, ultimately, the retailer's success. In your case, you might shop at Amazon purely due to price, and if the prices on Amazon were the same as at traditional retailers, you wouldn't use it. For other consumers, convenience may override price and they might shop at Amazon even if prices were 10% more than at their local retail. No right or wrong reasons here. For yet other consumers, it may be because Amazon stocks items that they simply can't get in their local market. No right or wrong answers here.
"And since copyright "theft" is really just infringment, which is a civil matter, all the RIAA can possibly do is sue people."
A common misperception. Here's the portion of copyright law which deals with criminal infringement.
Additionally, Googling on "criminal copyright infringement" will deliver links to data on criminal cases where copyright infringers have done jail time.
It's the convenience factor, of course. Many things are a little cheaper if you're willing to get in your car and wear out a little shoe leather. The fact that it's often a pain to drive to the mall, the CD store, the florist, etc. is a major force that drives e-commerce.
In my case specifically, I've bought lots of tracks from iTMS which are on albums that I would never spend the money to buy as a whole. So, for me, it's been a money saver.
Huh? Even that link, with all of its misinformation, correctly states that the money for the sale goes to the record label, not the RIAA.
In case I wasn't clear before... I've seen all these "a lot of the $0.99 goes to the RIAA!" statements going around, when it seems to be established that it goes to the record label -- you know, the outfit that put up tens or hundreds of thousands of dollars to cover the expenses of producing the music. Not the RIAA.
The record label and the RIAA are separate entities. The RIAA is a trade group which the record company may or may not be a member of. If I belong to the Automobile Association of America and you buy my old car from me, your money went to me -- not the AAA.
"RIAA's getting 70 cents per song. I googled it, so can you."
Can you give a link that shows that this money goes to the RIAA? It seems to be the common understanding that it goes to the record company."ey are selling songs for 99 cents a piece, nearly all of which the RIAA is taking back."
Important clarification: the bulk of the $0.99 goes to the record company. That record company may be a dues-paying member of the RIAA so it can be said that the money's going to the RIAA in the same way that it can be said that the money is going to the janitorial company that the record label hires to clean their offices.
Also remember that it is the record company that invested a hell of a lot of money to have the record made. A finished CD is the result of the hard work of lots of creative people who earn their living this way -- I'm not just talking about suits, but creative people who play an instrument or sweat over a mixing board or a Mac and a Wacom tablet because they love music. These people are paid by the record company, and the record company attempts to recoup its investment by selling the recording.
If you expect the record companies to sell to the online services at a loss -- it's not going to happen. Just as you would not knowingly enter into a deal where you weren't making a profit down the road, neither would a record company or any other business on the planet.
"It looks like people do want to pay for their music... if only you'd damn well make it reasonably attractive for them to do so."
In case it wasn't clear, iTunes would not exist if it weren't for the cooperation of record companies. To put a song online legally, you need permission from all the rightsholders, and the record label typically owns or co-owns the rights to the recording itself.
The record companies are behind the online services and want them to succeed just as much as you do.
How is the RIAA a monopoly? They're a trade organization representing record companies. There are hundreds if not thousands of record companies in the USA alone. Anybody can start a record company (or an online music distribution company, if they'd rather not deal with hard goods), and whether they choose to join the RIAA is up to them.
If you're an unsigned performer or band, you can try to get signed by a big, huge, successful record company which might want to pay you less per CD and might drop you at any moment. Or, you can sign up with a small indie label, perhaps get paid more per CD, and enjoy greater security but fewer sales. This "big vs. small" choice is how many things work. Work for Microsoft, or join a small code shop? Big university with the prestigious name, or small school where you'll really get to grow? The choice is yours. This is a tough decision to make, but it's not due to a monopoly.
If you want to cry "monopoly," a better target might be Clear Channel, which (as you know, I'm sure) owns far too many radio stations for its own good and thus is a major force in what people get to hear. But, Clear Channel != the RIAA.
You're correct on all three points and you've given a very astute description on why possession of copyrighted material without the owner's permission is not automatically against the law.
I apologize; I interpreted your "Is it because...?" question not as an honest request for somebody to tell you if it was correct or not, but as a way of conveying information as part of the question. I've seen that tactic before; it's called "begging the question" in rhetorical circles (although that term is widely misused). I thought you were begging the question. Here's more info on that tactic. Again, if you did not intend to beg the question, I apologize.
To give you a more direct answer to your question, then, the RIAA, like most entities, wants to act as efficiently as possible. It's a lot easier to take civil action in the form of a hailstorm of subpoenas than to try to arrange criminal prosecution of the same number of people.
I was going to point out the NET act to answer your other question but it looks like somebody beat me too it. For what it's worth, although the NET act is currently being applied to music pirates, one of its original intents was to close the loophole used by software pirates who were providing free warez FTP sites.
Also for what it's worth, sadly, I have read the material carefully. However I acknowledge how that "private financial gain" can easily trip up people who aren't familiar with the NET act and its implications.