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RIAA Accounting — How Labels Avoid Paying Musicians

kdawson posted more than 4 years ago | from the hypocrisy-part-deux dept.

Music 495

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."

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Yet I still pay for CDs... (1)

mfarah (231411) | more than 4 years ago | (#32890414)

Only nowadays, I buy mortly indies...

Re:Yet I still pay for CDs... (3, Funny)

Anonymusing (1450747) | more than 4 years ago | (#32890438)

Mortly Indies? Never heard of them. What kind of music do they play?

Re:Yet I still pay for CDs... (2)

mfarah (231411) | more than 4 years ago | (#32890492)

s/mortly/mostly/

Re:Yet I still pay for CDs... (0)

Anonymous Coward | more than 4 years ago | (#32890886)

I thought "Statue of Limitations" did that one?

Re:Yet I still pay for CDs... (0)

davester666 (731373) | more than 4 years ago | (#32890904)

In the news today, large corporations were found to screw the little guy, while publicly proclaiming that they are helping the little guy and that the little guy desperately needs them just to survive. Details at 11.

Re:Yet I still pay for CDs... (0)

Anonymous Coward | more than 4 years ago | (#32891104)

I never understood those cryptic replies... what the hell is that supposed to mean?

Re:Yet I still pay for CDs... (5, Interesting)

kemenaran (1129201) | more than 4 years ago | (#32890504)

We really need a wider adoption of a system like Flattr [flattr.com] . We could download music, and still pay the artists (and only them).

Anyone who is stupid enough to work with the RIAA (3, Insightful)

CSFFlame (761318) | more than 4 years ago | (#32890434)

deserves to get screwed. Seriously, go publish the songs yourself as an independent band. You don't need to be a record label to get it on itunes either (I think)

Re:Anyone who is stupid enough to work with the RI (5, Insightful)

santax (1541065) | more than 4 years ago | (#32890530)

That is easy said. But I happen to make one part of my income with music... Can you press a nice looking album in good numbers? Can you distribute? Can you promote them? Those guys can... it is easy to fall for it. And Itunes? Well that is a product that attracts a certain kind of public. Not necessary a public that can see the difference between good music and a fucking promotion stunt... Hell, they buy their music on a medium where the Beatles have no place....... not that I am that big of a fan, but would you really buy music (as a real lover) in a store that doesn't have this part musichistory? It's easy said mate, but in the real world, those guys have all the things you need. And they are willing to sell it. They just don't tell you the real price. Don't get me wrong though, we agree, but this is not the musicians fault. Not at all.

Re:Anyone who is stupid enough to work with the RI (4, Insightful)

99BottlesOfBeerInMyF (813746) | more than 4 years ago | (#32890738)

Can you press a nice looking album in good numbers?

No, but you sure don't need the RIAA for that.

Can you distribute?

That's the real trick, getting your music distributed in stores.

Can you promote them?

Yes, and even if I can't a publicity firm is a lot cheaper than the RIAA.

And Itunes? Well that is a product that attracts a certain kind of public. Not necessary a public that can see the difference between good music and a fucking promotion stunt... Hell, they buy their music on a medium where the Beatles have no place.......

That's just an inane comment. iTunes is a store. If some company decides for whatever reason they don't want to sell in that store, fine, but that doesn't mean "it has no place". You might as well argue "The Electric Fetus" record store is a store where Jaime Thietten has no place since she won't let a store with "fetus" in the name sell her music.

...would you really buy music (as a real lover) in a store that doesn't have this part musichistory?

Yes. Like 99.9% of people, while I can't buy the Beatles albums there, I'm not going to let a boycott by one copyright holder over a trademark issue prevent me from doing business with them. That's just dumb.

It's easy said mate, but in the real world, those guys have all the things you need. And they are willing to sell it.

Wait, that's your argument. Well, the iTunes store is out because the Beetles catalog isn't there so I guess people have to be ripped off by the RIAA? Times are changing. There are numerous indie labels that will share the profits, print the music, and put your music in the iTunes store along with other places. The RIAA's strength has been in locking down the distribution channels and promotional channels (radio) but with the internet here, those methods are starting to fail. There are a lot of better ways for real musicians to make money than try to get a deal with an RIAA label.

Re:Anyone who is stupid enough to work with the RI (5, Insightful)

sarahbau (692647) | more than 4 years ago | (#32890758)

Hell, they buy their music on a medium where the Beatles have no place....... not that I am that big of a fan, but would you really buy music (as a real lover) in a store that doesn't have this part musichistory?

So you're saying that just because the iTunes store doesn't have The Beatles, that people shouldn't buy from there, or if they do, they aren't real music lovers? I guess if you had to get all of your music from a single source, and you needed to have The Beatles, then iTunes wouldn't be for you, but iTunes has tons of stuff that you can't find in any brick and mortar store, and even a lot that Amazon doesn't have. Any real music lover wouldn't limit themselves by not shopping at a store simply because they didn't have one artist. If they did that, they wouldn't shop anywhere, as no store has every artist.

Re:Anyone who is stupid enough to work with the RI (1)

dward90 (1813520) | more than 4 years ago | (#32891172)

I suspect what it is meant is that the kind of people who buy from iTunes aren't necessarily your audience. You might be able to make a few sales, but if your target niche isn't served by that medium, you won't have much success.

Re:Anyone who is stupid enough to work with the RI (1)

Kuipo (948744) | more than 4 years ago | (#32890842)

I think your view on iTunes is a bit off, iTunes doesn't have a ban on The Beetles, The Beetles aren't on iTunes because their music is so wrapped up in copyright and legal issues that they don't agree with Apple's terms. Copyright and legal issues that organizations like the RIAA are full supporters of. So just because someone has the resources to get your music out there, doesn't mean that it's a good deal for you.

Re:Anyone who is stupid enough to work with the RI (4, Insightful)

unity100 (970058) | more than 4 years ago | (#32890850)

well excuse me, but what good is a nice looking album distributed, promoted in good numbers going to do to you, if you do not even get $23 out of $1000, as per in the related article ?

Re:Anyone who is stupid enough to work with the RI (1)

maliamnon (1848524) | more than 4 years ago | (#32890870)

You really don't even need itunes, if you can get server space just offer the download for free and set up a papal or Google checkout like they used to do for shareware. And if you have such little faith that people will donate, charge $.5 per song. Then all you have to do is advertise, and the big ad agencies may be expensive, but at least they won't take your copyrights away.

Re:Anyone who is stupid enough to work with the RI (1)

Whalou (721698) | more than 4 years ago | (#32891084)

[...] set up a papal [...] checkout [...]

This doesn't give you a big customer base.

Re:Anyone who is stupid enough to work with the RI (0)

Anonymous Coward | more than 4 years ago | (#32891124)

You're pontificating to the choir, man.

Re:Anyone who is stupid enough to work with the RI (2, Insightful)

beelsebob (529313) | more than 4 years ago | (#32890960)

That is easy said. But I happen to make one part of my income with music... Can you press a nice looking album in good numbers? Can you distribute? Can you promote them?

No, but the point of doing all that is to get people to pay you to listen to your music... Why would you get the RIAA to do it when people won't pay you to listen to it, but pay the RIAA instead?

Re:Anyone who is stupid enough to work with the RI (1)

blair1q (305137) | more than 4 years ago | (#32890976)

So what you're saying is your music doesn't make any money, but their marketing does.

So why should they pay you?

Re:Anyone who is stupid enough to work with the RI (5, Informative)

PopeRatzo (965947) | more than 4 years ago | (#32891024)

Can you press a nice looking album in good numbers? Can you distribute? Can you promote them?

Of course you can do all of those things without the RIAA or even a record label. And you can do it a lot cheaper. If you've ever seen an expense sheet from a label trying to justify not paying musicians (I have) you wouldn't believe how much labels claim stuff costs. When you do a tour of 5 college campuses and the label says they paid $20,000 to promote the shows when the only promotion that was done was using free spots on college radio stations and printing a single black and white flyer, you realize you're being screwed.

Further, it is quite possible to work with a record label but not with the RIAA. There is no such thing as a "standard contract" and if a label exec tells you that something in a contract is "standard language" run for the door. There are labels out there that will make all sorts of agreements, including I have learned from direct experience, letting the composer license the music via Creative Commons (which, by the way, is not a free license unless you make it so).

And creating your own label has never been easier or more economical. There has been absolutely no need for big record labels since at least 2003, but they keep going because of inertia and uninformed artists. More and more, the big labels are nothing but factories for wholly-fabricated "artists" like Lady Gaga or the finalists of American Idol. They simply skip over dealing with "artists" by fabricating their own. And this does not only apply to pop trash like Gaga. A lot of what's passing for rock and heavy metal is just Archies-style fabricated groups made up of out-of-work actors who basically lipsync and pretend to play their instruments while backing tracks play in concert.

The big music industry has been in its death throes for some years now. The corporations have already socked away the profits and are only padding their quarterly reports now until the end, when they'll just transition into some other scam. Maybe "internet television".

Re:Anyone who is stupid enough to work with the RI (1)

amicusNYCL (1538833) | more than 4 years ago | (#32891120)

Techdirt is probably making a killing off of Slashdot this week, but here's another article about several musicians who are able to be successful without the RIAA:

http://www.techdirt.com/articles/20091119/1634117011.shtml [techdirt.com]

The danger is if musicians start to think that the RIAA is their only connection to the fans. Nothing could be further from the truth.

Re:Anyone who is stupid enough to work with the RI (1)

LanMan04 (790429) | more than 4 years ago | (#32891176)

But I happen to make one part of my income with music...

Mistake #1.

Re:Anyone who is stupid enough to work with the RI (3, Informative)

JavaBear (9872) | more than 4 years ago | (#32890606)

Actually the artists are locked into the main labels, because indies apparently don't get the same air time as RIAA members do, definitely not in the prime time, on the main broad cast stations.

I don't know about iTunes.

Re:Anyone who is stupid enough to work with the RI (0)

Anonymous Coward | more than 4 years ago | (#32890676)

That's funny 'cause many indie labels actually get their products distributed by subsidiaries of big labels. It's similar to what happens with indie movie studios.

Re:Anyone who is stupid enough to work with the RI (0)

Anonymous Coward | more than 4 years ago | (#32890678)

That might have been a concern ten years ago. Today, radio is becoming increasingly irrelevant thanks to the Internet.

It's true that the major labels can do a lot for you. However, it's also true that you will pay dearly for what they provide. Most musicians are better off independent.

Re:Anyone who is stupid enough to work with the RI (5, Insightful)

Nadaka (224565) | more than 4 years ago | (#32890752)

radio is becoming increasingly irrelevant thanks to clearchannel...

Re:Anyone who is stupid enough to work with the RI (0)

Anonymous Coward | more than 4 years ago | (#32890732)

What is this "air time" and "broad cast stations" of which you speak?

Re:Anyone who is stupid enough to work with the RI (3, Insightful)

BoberFett (127537) | more than 4 years ago | (#32890864)

How many bands get airtime at all? When I listen to the radio, it's the same handful of songs playing over and over and over. Any small band who signs with a RIAA label hoping to get big might as well sell their instruments and buy lottery tickets. They've got about the same chances of striking it rich.

Re:Anyone who is stupid enough to work with the RI (3, Interesting)

AnonymousClown (1788472) | more than 4 years ago | (#32890644)

Lady Gaga.

She even has one of those "360 degree" contracts.

Let's see what happens to her.

Re:Anyone who is stupid enough to work with the RI (5, Interesting)

lawnboy5-O (772026) | more than 4 years ago | (#32890698)

That's more possible now, but back in the day, not a chance.... I have friends dying from depression and destitution because the were snookered by some exec, cut an album or two, never got paid, and then sued for no fulfilling the contract otherwise primarily because the couldn't eat, got sick, and to this day owe money to some one for their intellectual property.

Re:Anyone who is stupid enough to work with the RI (1)

b4upoo (166390) | more than 4 years ago | (#32890764)

How about we create laws to put people who take advantage of others under the prison! These music middle men should be regulated and closely studied to make certain that their "work" does benefit the content creators.
                          Frankly there may be a day when it is so easy to master and produce a CD that the middle men are thrown in the trash.

Re:Anyone who is stupid enough to work with the RI (1)

oldmac31310 (1845668) | more than 4 years ago | (#32890896)

you don't need to have a record 'deal' - you should BE a label if you intend to release your own music. Just start your own. If you say you are a record label, you are a record label. To get tunes on iTunes you do need to go through a middleman. For a fee CDBaby will get your music quickly and fairly painlessly on all of the major distibution networks, iTunes etc. Routenote also claim to be able to do it for free, though I haven't tried them yet. There just doesn't seem to be a direct way to get your tunes on iTunes as the artist. Not sure why this is.

Re:Anyone who is stupid enough to work with the RI (4, Insightful)

N0Man74 (1620447) | more than 4 years ago | (#32890986)

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

Listen, some of us may know what kind of deceitful manipulative wankers these guys are, but the general public is woefully unaware at just how underhanded the entertainment industries can be. We're talking about industries that know how to manipulate audiences and manufacture appeal among the masses... They know a thing or two about promoting images, including their own.

While I do wish more artists were better informed about what type of deal with the Devil they were making, but it's no excuse for how they get screwed over.

This whole scene is a mess. Big Labels have way too much control of what music people actually get exposed to, and the chances of making it anywhere without them are pretty slim. Even with the knowledge of how badly they treat the artists, some will still succumb because they feel it's their only real choice.

It's easy to say "just start an indie band", but what matters is not how many indie bands there are out there, but how many indie music customers there are out there. It's the buyers that make the difference, not the artists, and unfortunately I have little faith in the mass of sheep.

Re:Anyone who is stupid enough to work with the RI (1)

99BottlesOfBeerInMyF (813746) | more than 4 years ago | (#32891054)

You don't need to be a record label to get it on itunes either (I think)

Actually, I don't think this is true. Last I checked only labels can sell music through iTunes. That said, it does not have to be an RIAA label or even a very big one. There are many small publishers (like CD Baby) that will print CDs for you and sell your music through iTunes without gouging you or taking possession of your copyrights.

Albini's story redux (5, Informative)

192939495969798999 (58312) | more than 4 years ago | (#32890460)

Reminds me of this horrific classic of how recording artists get ripped off:
http://www.negativland.com/albini.html [negativland.com]

Re:Albini's story redux (0)

Anonymous Coward | more than 4 years ago | (#32890706)

Albini's numbers also involved a lot of stuff that happens from a former contract gone bad, gear that goes to the band, plus a lot of other worse case scenarios. If you really look over this the band gets a lot more out of it than what he claims.

Re:Albini's story redux (1)

192939495969798999 (58312) | more than 4 years ago | (#32890996)

The point is that the company will find some way to try to claw back that investment, and unless you do extremely, exceptionally well on ROI, you will not be rich at all. The truly insidious part is that as you start to make more, the label rigs the ROI against you by taking out more pr and stuff in the name of selling more, when really it just eats away at your profit.

Re:Albini's story redux (1)

d3jake (1335521) | more than 4 years ago | (#32890722)

Wow... clearly this isn't a new concept, and yet the common man likely hasn't clue one.

Well duh. (5, Funny)

Arancaytar (966377) | more than 4 years ago | (#32890468)

The RIAA can't very well claim to be protecting the starving artists if the artists aren't starving.

Question.. (1)

Paracelcus (151056) | more than 4 years ago | (#32891004)

If they (performers, pop "music") do not make money, how is it that so many of them are obscenely rich?

Re:Well duh. (1)

godrik (1287354) | more than 4 years ago | (#32891028)

sir, you made my day. Thank you!

Nothing new (1)

kemenaran (1129201) | more than 4 years ago | (#32890472)

So we all agree there: we, as Internet actors, have to invent collectively new economic models for assuring revenues and living to musicians — and it's likely these models shouldn't and won't include the current record labels.

Re:Nothing new (1)

MozeeToby (1163751) | more than 4 years ago | (#32890588)

I've got it! They could give their music away for fee (they don't make any money off it as is so no loss there) and sell concert tickets and merchandise for their income (which is basically what most signed bands now do anyway). So to recap: Consumer gets free and legal music. Musician gets at least what they get now.

Re:Nothing new (4, Funny)

HeronBlademaster (1079477) | more than 4 years ago | (#32890762)

They could give their music away for fee

The ironing is delicious.

Re:Nothing new (1)

countSudoku() (1047544) | more than 4 years ago | (#32890856)

Unfortunately that line of revenue is teaming with parasites as well. $50+ for a show?! Forget it. How much will the artist (not !Prince, what the hell is his unicode symbol name anyway!?) get after TicketBastards & their ilk charge me their $6 ticket handling fee, $8 convenience fee, $5 online ordering fee, $20 for parking, $8 for a suspicious hot dog at the event, $25 for a T-shirt, etc, etc, etc. I'll wait and download the bootlegs, thank you. Oh, and get off my lawn!

Re:Nothing new (1)

dloose (900754) | more than 4 years ago | (#32891146)

Prince... the artist you're thinking of is called Prince.

Re:Nothing new (1)

yargnad (1456405) | more than 4 years ago | (#32891052)

Ive felt this way for since Napster started. My music is the advertisement of my product. If you want to see me perform live, you'll have to pay. How are artists supposed to gain recognition if their product is not as accessible as possible, if most people will never hear it?

It's akin to asking someone to buy a car without driving it first knowing you will not be able to return it if you don't like it, because they assume once you take it home you're going to make an exact copy and dupe the dealer by returning it. We all know this is not what is happening. If we like the music, we will keep the album, not make an inferior version and return the original. This was never the issue. The RIAA just wants to protect their dying business model to no end, however unjustified their position is.

They should have just gotten on board with Napster to begin with and had a great distribution model from the get go. People loved it and now the RIAA realizes they can't win and should have done just that instead of making people hate them as much as the artists do.

Jamendo is a great recommendation, there needs to be more sites like that and maybe Flattr or Bitcoin could be integrated into one of those sites to facilitate payments.

Re:Nothing new (0)

Anonymous Coward | more than 4 years ago | (#32890692)

Jamendo. Save a small overhead fee to the website, the artists get all of the money I give. Since I want to support artists and not labels I am happy. Except that most of the music on the site sucks :(

Sheds some light (1)

bojangler (1851778) | more than 4 years ago | (#32890482)

I guess I always assumed the musicians were getting screwed in their deals, just never knew the breakdown. This just reinforces my decision to support artists through live performances and "swag" sales at said performances rather than through record sales.

Re:Sheds some light (0)

Anonymous Coward | more than 4 years ago | (#32890576)

For those artists with record deals, most of that revenue ends up in the pockets of the record label anyway. Sadly :(

New Slogain... (1, Insightful)

Anonymous Coward | more than 4 years ago | (#32890522)

Download Music, Buy Tickets, Save Musicians

Getting what you ask for (1)

jcwayne (995747) | more than 4 years ago | (#32890526)

If Prince wants his advance [mirror.co.uk] without having to worry about all those numbers [slashdot.org] then this is what he gets.

ok so at some point (4, Insightful)

nimbius (983462) | more than 4 years ago | (#32890528)

someone has got to play devils advocate. the latest round of carefully cultivated pop stars and rock bands could very well be designed from their inception to be too outright stupid to determine how this scheme works. Rap stars are groomed and trained to pay attention only to the lambos, the parties, and the mansions. the quick-change mainstream music is where the RIAA is getting the most bang for their buck, and despite some artists attempts to buck the trend by creating their own labels their efforts are sadly misplaced. anything in the industry that so much as glances at a musical instrument is shackled to the wagon of the RIAA and regardless of whether artists select an independent distribution channel or the more commonly recognized channels its extremely difficuly to avoid paying at least some funding to the RIAA.

Re:ok so at some point (5, Informative)

MightyMartian (840721) | more than 4 years ago | (#32890778)

That may apply in some cases, but one case I have been following (mainly because I'm a huge fan) is Robert Fripp's multiyear odyssey to get UMG to give him a proper accounting of King Crimson's royalties. He has fairly good evidence that the band has not been properly paid out, but because of the complexity involved due to the mergers and buy-outs and such of publishing companies and the like, whether through maliciousness or incompetence, he and his band have been screwed. What's more, there is some pretty good evidence as far as online sales go that King Crimson has not seen royalties at all, and worse, in many cases, the artists were never even asked, despite a good deal of control over the release of recordings that the Crimson still holds. Fripp tried for some time to get to talk to someone, anyone, in a position of authority who could produce an accounting of earnings and royalties, and finally had to sue UMG, and only now is he finally getting some movement.

The general methodology of UMG, at least, is to delay, obfuscate and obstruct, claiming at times that it can't answer questions from subordinate companies, or forcing artists to deal with individuals who ultimately have no authority to answer or compel someone else to answer the artist's requests. While I suppose it could be colossal incompetence, I posit that the system is purposefully set up to steal money owed to artists.

The same thing has happened over at EMI, where the Beatles have been forced to sue over withheld royalties. I'm assuming every record company and major label probably uses the same tactics to screw over artists.

Now (1)

goontz (1441623) | more than 4 years ago | (#32890538)

The lawsuit-happy RIAA is probably now going try taking on Techdirt. They're going to need to hire some lawyers with different specialties than their usual ones.

Not exactly news (5, Informative)

BBTaeKwonDo (1540945) | more than 4 years ago | (#32890540)

TFA is heavily based on a Courtney Love speech from 10 years ago at http://www.salon.com/technology/feature/2000/06/14/love/print.html [salon.com] . Prettier charts in TFA, though.

Re:Not exactly news (1)

N0Man74 (1620447) | more than 4 years ago | (#32890634)

You beat me to that link! I was about to post that link myself! It's definitely worth a read and very enlightening. I'd mod you up if I could, just so more people would see it.

Re:Not exactly news (1)

Servaas (1050156) | more than 4 years ago | (#32890822)

That's $45,000 to live on for a year until the record gets released.

Poor bastards! Seriously though, 2 videos and you spend a million dollars? Random numbers are random yes.

Re:Not exactly news (1)

schon (31600) | more than 4 years ago | (#32891160)

And Courtney Love's article was heavily based on an article by Steve Albini in "Maximum Rock and Roll", 20 years ago - http://www.negativland.com/albini.html [negativland.com]

I have a cookie for anyone who can one-up that. :)

Um, um... (4, Insightful)

rickb928 (945187) | more than 4 years ago | (#32890548)

"Remember all this the next time a record label says they're trying to protect musicians' revenue."

I haven't thought that labels were trying to protect musicians' ANYTHING since 1972. And it wasn't true before that.

So question (2, Insightful)

easterberry (1826250) | more than 4 years ago | (#32890552)

if all the bands end up with 0 dollars how does MTV Cribs work? Like, most chart topping musicians have boatloads of money, if they're getting screwed down to nothing where is that coming from?

Re:So question (4, Informative)

binkzz (779594) | more than 4 years ago | (#32890626)

Concerts and merchandise. Not CD sales. That's why Radiohead had no problems giving away their songs for free online.

MTV Cribs (5, Insightful)

tekrat (242117) | more than 4 years ago | (#32890702)

I think everything on that TV show is rented. I cannot believe that skateboarding hot-kid-of-the-month can afford a McMansion, 18 Escalades, a room full of arcade machines, yadda-yadda, from 2 or 3 endoresement deals when he will be old and stale before the year is out.

Either that, or the repo men have a heck of a time 6 months down the road.

That TV show, just like *everything* on TV is totally fake.
It's just not possible given the realities of these situations.

Re:MTV Cribs (0)

Anonymous Coward | more than 4 years ago | (#32891112)

It's rented alright. The record label is the landlord, and they rent it to the artist. And the rent is yet another thing they add on to your expense account.

Re:MTV Cribs (1)

NevarMore (248971) | more than 4 years ago | (#32891142)

If the repo men can come and take it, then you really didn't own it any more than if you rented it.

Re:So question (2, Interesting)

Enry (630) | more than 4 years ago | (#32890772)

In a grocery store that would be called a loss leader. Have something that you make no money on, but build up enough interest in something else that they'll buy it for enough money to make up the loss and then some.

In this case, you basically give away the CDs and the RIAA screws them over. But in the meantime, they're making a shedload of money from touring.

I don't want to deny the RIAA is screwing them over, but without the RIAA, they wouldn't be on tour to make the money.

Me, I'll just keep paying for a Magnatune subscription. Not all of their artists tour this area.

Re:So question (0)

Anonymous Coward | more than 4 years ago | (#32890638)

Concerts and merchandise. That is where bands make their money.....

Re:So question (3, Insightful)

Conspiracy_Of_Doves (236787) | more than 4 years ago | (#32890642)

It's not their money, it's the label's.

The labels have to show a few musicians that at least appear to be rich. Otherwise no one would ever sign with them.

Re:So question (0)

Anonymous Coward | more than 4 years ago | (#32890648)

Chart-topping musicians are the only ones that sell enough albums to recoup the advance and start receiving money.

Re:So question (1)

goontz (1441623) | more than 4 years ago | (#32890664)

This is specific to album sales. Tours and ticket sales, clothing, other promotional or advertising gigs, licensing, etc, all account for a lot of money.

Re:So question (1)

easterberry (1826250) | more than 4 years ago | (#32890786)

But why wouldn't the industry take equally huge chunks of that revenue?

Re:So question (1)

AndrewNeo (979708) | more than 4 years ago | (#32890938)

Probably because in this space all they hold is the copyright, and somehow they don't get to take out their protection money^w^w loan payments.

Re:So question (1)

goontz (1441623) | more than 4 years ago | (#32890956)

But why wouldn't the industry take equally huge chunks of that revenue?

Because "the industry" isn't the RIAA?

Re:So question (1)

Zerth (26112) | more than 4 years ago | (#32890694)

Loans against future revenue. Just show the bank a million dollar check from the label and don't tell them that the label makes you spend 75% of it on your next record.

Re:So question (1)

Rogerborg (306625) | more than 4 years ago | (#32890760)

Hos. They be pimping they stable of fly bitches like crazy mofos, playa.

Re:So question (0)

Anonymous Coward | more than 4 years ago | (#32890816)

Two things:

1) You are seeing a tiny minority of musicians who hit it really big, through savvy or luck (musical talent seems to be orthogonal). But even musicians you've heard of are getting screwed.

2) A lot of that is bought for them by the labels. They're nice gifts, I sure as hell wouldn't turn them down either, but it just reinforces who owns who. I wouldn't even be surprised if the company repo'd it if their star got uppity and left.

Cribs is fake (2, Interesting)

Anonymous Coward | more than 4 years ago | (#32890970)

A Florida coupled sued the show for using their rented home as a set for a Cribs episode without permission.

They rent a property, borrow props and cars, film it, the rapper, does his thing and presents his false front, but the money isn't there. Even multi-platinum selling artists can't pay the $5 - $10 million needed to buy the mansion they pretend to own.

Re:So question (1)

Jeff DeMaagd (2015) | more than 4 years ago | (#32890980)

If you "make it", you're probably making the money on live performances. For most bands, live performances isn't an easy life, living out of suitcase or in a rolling metal box. I bet the venue takes most of the money, unless you're such a big draw that you can command tickets several times that of a lesser band in the same venue.

Re:So question (1)

hondo77 (324058) | more than 4 years ago | (#32891116)

Not all bands end up screwed. The ones that sell a lot make a lot. They're in the minority, of course.

Re:So question (1)

Speedcraver (868818) | more than 4 years ago | (#32891118)

I am not sure how this relates to today's market. 15 years ago, if you had a hit in the top 100 you were pretty much guaranteed $100,000 per year from royalties. At least that is what I was told when I was working at a recording studio and this subject came up.

Re:So question (0)

Anonymous Coward | more than 4 years ago | (#32891122)

Because chart topping musicians can negotiate a very different contract with the record labels. but that's just a handful of contracts.

Better a well-known artists than a no-name one (0)

Anonymous Coward | more than 4 years ago | (#32890574)

RIAA rules!! It's like software piracy - gets the app known even though the creator (artist) see no money in return. All in all, it's win-win. And logical.

I love the breakage rules (1)

gurps_npc (621217) | more than 4 years ago | (#32890716)

Thats where they take back a percent of the costs to account for breakage of the medium. Of course, ever since we switched from vinyl records to plastic cd's, the actual breakage is about ... nil.

Re:I love the breakage rules (1)

zotz (3951) | more than 4 years ago | (#32891134)

Sure. But I hear the breakage on downloads is terrible.

The label and the artist pretty much agree... (1)

AthleteMusicianNerd (1633805) | more than 4 years ago | (#32890728)

going in that the artist will take profits from touring and the label takes the profits from album sales. Indie artists still have a tough time without a label because advertising costs are high. Getting onto the home page of iTunes or played on MTV isn't cheap, and connections hold as much weight as money does.

That's all well and good... (-1, Flamebait)

bonch (38532) | more than 4 years ago | (#32890730)

This is all well and good, but how does this justify piracy? Because we all know stories like this are used by pirates to justify their actions. "I'm fighting against the RIAA!" Well, no, you're ripping an artist off. Artists willingly sign their contracts, and nobody forced them to sign their deals which made them famous.

The reason Slashdot loves these types of articles is that pirates try to remove their own sense of guilt by portraying someone else as the bad guy. This way, they're not ripping off artists. Instead, they're good-guy cultural revolutionaries rebelling against a faceless acronym. It's total horseshit ego-coddling that obscures the truth--you're ripping off a musician, filmmaker, software developer, and so on. It's also hypocritical, because people on this site get up in arms when GPL code is "stolen." Apparently, theft of intellectual property is suddenly wrong again in that situation.

Anti-piracy comments on Slashdot have a tendency to get modded down, so it'll be interesting to see how this post ends up. I've got the karma to burn.

Who is trying to justify piracy? (2, Informative)

walterbyrd (182728) | more than 4 years ago | (#32890968)

I am not sure what you are posting about. The article is not trying to justify piracy, neither are most posters.

And they think consumers are theives? (4, Insightful)

_0rm_ (1638559) | more than 4 years ago | (#32890750)

Pot meet kettle.

Re:And they think consumers are theives? (0)

Anonymous Coward | more than 4 years ago | (#32890974)

Kettle Meet Frying Pan

Hear, hear! (5, Interesting)

jemenake (595948) | more than 4 years ago | (#32890792)

I read "Confessions of a Record Producer" where the dude gives you the step-by-step breakdown of where all of the money goes. One of the interesting ones is that the record companies now take out more for every CD pressed than they did for pressing LP's or cassettes, even though it's actually cheaper to make CD's.

He said that, every time he'd be at a cocktail party and someone would find out he's a record producer, they'd always ask "So, if I made an album that went gold, how much money would I get?". He proceeds to go through the cost accounting (which he describes earlier in the book) to arrive at some number like a 4-piece band making a gold record results in each member getting something like $23,000 or something. Don't quit your day job, fellas!

Also, back when Napster was really rolling, and the RIAA was freaking out, I recall reading an article by Janice Ian (a 70's 3-hit wonder) saying that she never got a statement from her record company that didn't say that she owed them money.

If you watch the RIAA's behavior carefully, you'll see that they're not really about attacking "piracy". They're trying to prevent any kind of delivery mechanism which takes them out of the loop... that connects the artist directly with the listener. "Disintermediation" is the big word for it. I recall several years back, there was a website (I forget it's name) where unsigned bands could post their songs as mp3's and they'd tag them with what known bands they thought they sounded like. So, you could go on there and search for "Dead Milkmen" and you could find all of these undiscovered bands who were influenced by them.
...
... and, of course, the RIAA figured out how to sue them into oblivion, even though they weren't really infringing on copyrighted material.

The Beatles were too optimistic, apparently... (4, Funny)

Anonymous Coward | more than 4 years ago | (#32890800)

Let me tell you how it will be;
There's 23 for you, 977 for me.
'Cause I’m the RIAAman,
Yeah, I’m the RIAAman.

Should zero per cent appear too small,
Be thankful I don't sue you all.
'Cause I’m the RIAAman,
Yeah, I’m the RIAAman.

And you're working for no one but me.

RIAAman!

I laughed and then cried (2, Funny)

Demonantis (1340557) | more than 4 years ago | (#32890826)

by Simon, Jul 13th, 2010 @ 9:41am But stronger DRM laws will fix this, right?

T'is the Devils Work. (2, Funny)

Securityemo (1407943) | more than 4 years ago | (#32890894)

Jack Chick was right about the music industry, just not in the way he thought he was.

So how are "artists" so ultra-rich? (1, Insightful)

walterbyrd (182728) | more than 4 years ago | (#32890908)

Even rappers, who do nothing more than chant to a monotonous beat, live in multi-million dollar estates.

If no-talent street thugs make that kind of money, how bad could the situation be?

Nothing new here (5, Informative)

mbone (558574) | more than 4 years ago | (#32890928)

Absolutely nothing new here.

Steve Albini [negativland.com] .
Courtney Love [gerryhemingway.com] .

Both, I believe, 10+ years old.

lol (1)

Charliemopps (1157495) | more than 4 years ago | (#32890932)

The majority of artists never record an album. Most play in your local bar, at your wedding, in parks. The number of artists that actually get picked up by a label are less than a fraction of a percent. They are not picked up because they are any good, they are picked up because they are marketable.

The real criminal here... (3, Funny)

Drakkenmensch (1255800) | more than 4 years ago | (#32891034)

... is whoever actively worked to make Justin Bieber a star.

Stop using the labels that screw them? (0)

Anonymous Coward | more than 4 years ago | (#32891068)

Perhaps then, these musicians should do their homework and stop working with labels that are in effect just RIAA thugs looking to screw the artists as bad as they screw everyone else...

most people have no savings (3, Insightful)

fermion (181285) | more than 4 years ago | (#32891138)

Most people take on debt to survive. They have mortgages, car loans, credit cards. At the end of the month, after paying all debts and necisities, most people have no money left. Even after years of work, one might have a few non liquid assets, but most people have net debt.

Why celebrities should be so special as to take huge loans and live lavishly and then end up ahead is a question no one seems to want to ask. If I were allowed to take a multimillion dollar loan against future earnings my life might be much better. I certainly would have difficult paying it back, but even living off the investment I would have more money. Such a loan might return more in investment than the average income

So record labels are loan sharks giving away money in exchange for future earnings. Some might not be able to pay back the loan. Well, boo hoo. Millions of Americans are in the same boat, with things such as pay day loans, but don't have the life style that these guys do. It is why people see how much Madonna has, and how little they have, and find it hard to understand how listening to one of her songs without a license is stealing. Does she still have a house?

About the only Music I pay for (1)

DarthVain (724186) | more than 4 years ago | (#32891150)

is Live. If I like the music and they are selling a CD, I'll buy it and pay cash (About the only place I play a CD is in my Car anyway). That way I know the artist is getting the money directly, and by paying cash they will likely not pay taxes on it either. They are also likely to spend it directly on whatever bar they are in, or to cover traveling expenses.

I think I am much more likely to go to a concert these days than go to a retail store and buy a CD of anything.

That said, I don't think I have downloaded anything in quite some time, mostly as I haven't heard anything too compelling that I would really wish to hear. I think I downloaded 3 CD's last year, that I might go out and buy simply because I like them, and I feel a bit guilty about it because of that. However, none of them are really mainstream so I might have a hard time even finding them... Though I can probably find them on Amazon or something.

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