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How Labels And Artists Divvy Up Your Dollar Online

timothy posted more than 11 years ago | from the heads-i-win-tails-you-guessed-it dept.

Music 513

Subliminal Fusion writes "Business 2.0 has an article that breaks down where that $1 goes when you buy a song from iTunes or other online music services. Key figures: the site takes .40, the labels take .30 and the artists get a measly 12 cents for each download."

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513 comments

hmmm (-1, Offtopic)

deadsaijinx* (637410) | more than 11 years ago | (#6265217)

well, i'm too late for fist post.... but here's to wishful thinking

Re:hmmm (-1, Offtopic)

Anonymous Coward | more than 11 years ago | (#6265228)

I WIN!!! Give me a dollar!

Re:hmmm (-1, Offtopic)

Anonymous Coward | more than 11 years ago | (#6265255)

This is MY first post. There are many others like it, but this one is mine.

First Post (-1, Troll)

Anonymous Coward | more than 11 years ago | (#6265219)

0wned

Re:First Post (-1)

Super Mario Troll (542762) | more than 11 years ago | (#6265223)

YOU FAIL IT!!!!!

it should be 50/50 (5, Insightful)

ender_wiggins (81600) | more than 11 years ago | (#6265224)

I would rather give the artist 50% and the site 50%. leave B&M sales to fund the other leaches.

fristy ps0t (-1, Offtopic)

Anonymous Coward | more than 11 years ago | (#6265225)

frist ps0t from Unixware!

We at SCO say hi!

Re:fristy ps0t (-1)

Super Mario Troll (542762) | more than 11 years ago | (#6265242)

YOU FAIL IT, ALSO, SCO GAYBOS!1!!!!!1!

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I've always thought... (5, Insightful)

bazabba (669692) | more than 11 years ago | (#6265229)

that the artists should be attacking their own labels...not their fans.

Re:I've always thought... (1, Insightful)

Anonymous Coward | more than 11 years ago | (#6265332)

we do, but u guys barely hear about it because no label will put out music by an act that dusnt like being told what to do...

Re:I've always thought... (2, Interesting)

ChazeFroy (51595) | more than 11 years ago | (#6265355)

Fortunately, touring is the time that bands make their wads of cash. Bands earn their well-deserved buck, and the real fans get to see what the music is really about.

Unfortunately, unless you are the Rolling Stones or Phish (or the like), bands don't break even on touring.

Re:I've always thought... (1)

larryleung (664571) | more than 11 years ago | (#6265370)

Well most are. But the labels own most of the traditional distribution channels so you often don't here of these artists.

Thats way less then the artists get from Kazaa. (5, Funny)

Kenja (541830) | more than 11 years ago | (#6265230)

This is why I only use Kazaa to get my music. That way I know the artist is getting 100% of the 0.00$ I spend.

0/0 != 100%, it is undefined, dumbass (-1, Funny)

Anonymous Coward | more than 11 years ago | (#6265251)

take a math class

who's the dumbass? (2, Informative)

DohDamit (549317) | more than 11 years ago | (#6265272)

It's not 0/0, stupid asshat. It's 0/100. Stupid trolls...the next evolution.

Re:0/0 != 100%, it is undefined, dumbass (1, Interesting)

etymxris (121288) | more than 11 years ago | (#6265281)

100% of 0 is 0. And everyone gets a hundred percent of the total, including me. Math is fun.

(It all depends on how you ask the question. If you ask "How much is 100% of 0?" you have a well defined answer. If you ask, "What percentage of 0 is 0?" you have a problem with division. The solution: be a little more charitable and allow yourself to laugh every once in a while.)

"measly"? (5, Insightful)

RLiegh (247921) | more than 11 years ago | (#6265232)

They're getting just under half of what the labels are getting.

IMHO, "measly" would if they got three cents and the labels got fifty seven cents.

Of course, if they went independent, they'd get 60 [assuming the sites still charged 40 cents].

Interesting math... (2, Insightful)

cyb0rg (580354) | more than 11 years ago | (#6265233)

40+30+12 ?= $1

Re:Interesting math... (0)

Anonymous Coward | more than 11 years ago | (#6265246)

RTFA. Other people get the rest. Foo.

Re:Interesting math... (1)

Kenja (541830) | more than 11 years ago | (#6265247)

Interesting reading ability.
40+30+12+10+8=100.
RTFA.

Re:Interesting math... (2, Informative)

bazabba (669692) | more than 11 years ago | (#6265252)

Key figures: Read the article for the other figures. It shows how its divided up 5 ways.

Re:Interesting math... (4, Funny)

Feztaa (633745) | more than 11 years ago | (#6265253)

CowboyNeal gets the other 18 cents.

Re:Interesting math... (3, Funny)

deadsaijinx* (637410) | more than 11 years ago | (#6265259)

well, using crazy RIAA math, you must subtract the negative dollars they never earned due to piracy. so, the equation is 40+30+12--18=$1

Re:Interesting math... (1, Informative)

iate138 (677385) | more than 11 years ago | (#6265261)

if you go to the article and check out that little pie graph, you'll see there's 8 cents for the publisher. .40+.30+.12+.8 does equal $1.00.

Re:Interesting math... (2, Funny)

iate138 (677385) | more than 11 years ago | (#6265269)

ha. hahahahaha...not only am i too late, i did the math wrong too... *slams head into desk*

Re:Interesting math... (0)

Anonymous Coward | more than 11 years ago | (#6265289)

lol, wow .... it's almost embarassing, isn't it?

Re:Interesting math... (1)

danila (69889) | more than 11 years ago | (#6265325)

Heh. You don't even need to know how to add four numbers correctly to be moderated "Informative" on Slashdot.

56 + 32 = 98 (Hint! Hint!)

Re:Interesting math... (0)

Anonymous Coward | more than 11 years ago | (#6265360)

again, i say wow, reminds me of a post were i got modded down for laughing at someone who had no clue what he was talking about, then the guy who responded to me forgot to divide the time by the proccessors, and got modded up. just show math, and the you will be modded up

Re:Interesting math... (0)

Anonymous Coward | more than 11 years ago | (#6265279)

Read the article. Why do people post comments without reading it!?

Re:Interesting math... (0)

Anonymous Coward | more than 11 years ago | (#6265352)

Why do people post comments without reading it!?...

Duh. If you post really quickly you can get Karma from the Moderators who haven't read the article either.

RTFA (2)

xombo (628858) | more than 11 years ago | (#6265334)

Look at the article, those are just key percentages, there is more to be given out, and it is in a chart on the article.

Wow! A whole 12% (0)

Anonymous Coward | more than 11 years ago | (#6265235)

Which will then be divided between singers, songwriters, musicians, etc.

how is it (2, Interesting)

alfredo (18243) | more than 11 years ago | (#6265236)

divvied up with the writer?

Re:how is it (1)

black mariah (654971) | more than 11 years ago | (#6265319)

If there is a songwriter, they're usually paid in advance, under the table, so nobody knows that their 'artists' are talentless shit.

Artists should skip the label part! (3, Insightful)

seanthenerd (678349) | more than 11 years ago | (#6265237)

Why don't artists skip the labels? Go straight to the Apple Music Store or mp3.com or whatever? With that extra thirty cents a song, they don't need support from Universal or Sony or whoever.

Of course, the hard part is getting started...

Re:Artists should skip the label part! (1)

prockcore (543967) | more than 11 years ago | (#6265288)

Why don't artists skip the labels? Go straight to the Apple Music Store or mp3.com or whatever?

Great idea, now go convince Apple to accept music from unsigned artists.

Re:Artists should skip the label part! (2, Insightful)

afidel (530433) | more than 11 years ago | (#6265311)

Apple works with Indie labels, so start your own label, if you can meet whatever terms Apple has set to participate then you should be good. Hell some top artists could start a co-op label that could operate sort of like a limited partnership where the overhead of things like accountants, lawyers etc could be pooled and all of the profits could be funneled to those who produced them.

In soviet russia (-1, Troll)

Anonymous Coward | more than 11 years ago | (#6265293)

I"M BASHING U'R HEAD IN WITH A TIRE IRoN!!!
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Re:Artists should skip the label part! (0)

Anonymous Coward | more than 11 years ago | (#6265321)

yeah, why dont all artists do the same too? all people who wanna make independent movies, or write books and do anything...except i have to do all my promotions, pay for all my expenses, set up my own interviews with magazines to promote my own works, pay my printers, etc etc etc, etc

I been trying to publish a book by myself for 2 years now and guess what, i cant even find enough people to buy it cover myprinting expenses. but all in all, u are probably some pimpy 15 years old who by his post shwos howmuhc you really know how the realworld operates. sheeesh.

Re:Artists should skip the label part! (1)

danila (69889) | more than 11 years ago | (#6265338)

Sometimes it's hard to do even when you have the money in your pocket... But seriously, try online publishing or just giving it away online for free if you don't need money. :)

Re:Artists should skip the label part! (1)

Qzukk (229616) | more than 11 years ago | (#6265326)

Because 20-30 years ago, back before there was an online to sell music on, artists signed contracts to give the labels the right to distribute their music. Then recently, the online market appeared, and a couple of musicians wanted to sell online, but they were smacked down. A lawsuit over contract law proceeded (did the artists sign away rights/distribution channels that didn't exist at the time of the contract?) and then people quit caring about 20-30 year old songs anyway.

Re:Artists should skip the label part! (1)

black mariah (654971) | more than 11 years ago | (#6265356)

You can't skip the labels. Unless, of course, you want to pay for your own advertising, merchandising, recording costs, new gear and keep the van running all on the $150 (or less) you make from each gig. Labels provide financial support.

Apple won't deal with every artist down the block. (0)

Anonymous Coward | more than 11 years ago | (#6265358)

It just doesn't make sense. They want a nice big block of material. Making penny ante deals with every new artist for just 12 songs wouldn't be worth the hassle. Posts like your show how little you know about business.

But hey, the artist is free to set up his own little site, set up his own checkout basket and collect 100%.

That seems fair... (4, Funny)

IronTek (153138) | more than 11 years ago | (#6265239)

Afterall, the labels need all of that money to keeping buying the bullets they constantly (and consistently) shoot themselves in the foot with.

It adds up!

Interestingly enough (1, Interesting)

Anonymous Coward | more than 11 years ago | (#6265240)

That doesn't add up to a dollar. But the musician and his recording company are still getting more than anyone else. It's just the recording company is screwing the musician. ... On the other hand, when independants start being sold through the Apple Store, it looks like those musicians will be getting their full 42 cents.

Isn't that a step up? (5, Interesting)

Niahak (581661) | more than 11 years ago | (#6265241)

the artists get a measly 12 cents for each download. From all the articles there have been about the artists under the RIAA, 12% is a hell of a lot better than the cut they get normally. Sure, it's measly, but it's probably a step up. Here's to hoping it'll increase.

Re:Isn't that a step up? (1)

topham (32406) | more than 11 years ago | (#6265260)

It is from that 12% they deduct the Advance they were given to produce it in the first place.

So, while they slowly pay off the advance the record company applies it's 30+% to it's profit margin...

Re:Isn't that a step up? (1)

Planesdragon (210349) | more than 11 years ago | (#6265322)

It is from that 12% they deduct the Advance they were given to produce it in the first place.

Maybe you're not familiar with the concept of "advance."

An advance is an interest-free loan from the producer to the artist against the earnings of the album.

Not exactly (1)

cameldrv (53081) | more than 11 years ago | (#6265354)

Yeah, but you have to pay most loans back. If the album only sells a few copies, the artist still keeps the advance. If the album makes money, then it retroactively becomes a loan. Otherwise it is just payment for making the album.

Re:Isn't that a step up? (1)

black mariah (654971) | more than 11 years ago | (#6265367)

Yah. So even after getting fucked out of 78% of the profit from their song, they get nailed in the ass for probably a hundred grand more (Minimum).

Re:Isn't that a step up? (4, Informative)

Hawthorne01 (575586) | more than 11 years ago | (#6265340)

the artists get a measly 12 cents for each download.

From all the articles there have been about the artists under the RIAA, 12% is a hell of a lot better than the cut they get normally. Sure, it's measly, but it's probably a step up. Here's to hoping it'll increase.

According to one of the best articles written on the subject [janisian.com] , it's a big step up.

The $0.99 thing... (1)

Thinkit3 (671998) | more than 11 years ago | (#6265243)

Ok, it's a tangent, but the whole marketing prices I think is a symbol of distrust. Large corporations (who are more likely to do the ".99" nonsense) are willing to insult their customers in the belief that they may get more sales. It's fitting that the artists get so little--clearly they don't respect them either. It's a sickness, and it's disgusting.

Re:The $0.99 thing... (1)

zapfie (560589) | more than 11 years ago | (#6265283)

Um.. they do the $0.99 because it works. Works on me, even, though I know in my head it's really just $1. I don't see how it's a sickness or disgusting.

Re:The $0.99 thing... (1)

Thinkit3 (671998) | more than 11 years ago | (#6265292)

No big deal online, but it does annoy at, e.g. fast food places with 99 cent menus. You have to deal with getting a penny back. But that's not the point. The sickness is that these marketers don't care that they are making the world a more annoying and less elegant place in the hope of maybe getting more purchases (I know I'm much less likely to buy stuff with prices like that).

Re:The $0.99 thing... (1)

deadsaijinx* (637410) | more than 11 years ago | (#6265313)

no, because of tax you have to cary more than a dollar for those damned 99 cent menus... tricky little bastards

Re:The $0.99 thing... (1)

zapfie (560589) | more than 11 years ago | (#6265328)

Hm.. I will agree marketing is a shady world at best, in my opinion.. but it also reflects poorly upon the population in general, because they put up with it. If people were like you in general, less likely to buy things with prices like that, you can be guaranteed that pricing would change pretty quickly to something consumers were happy with.

Measly 12%? (5, Interesting)

IthnkImParanoid (410494) | more than 11 years ago | (#6265245)

Is 12% really that measly? I agree it's low (unless the artist is a britney spears/in sync clone, in which case it's too high), but what percent does an artist get from CD's? What percent is standard for authors? My mom is an author, and gets about 25 cents from a 5.99 paperback... Seems like online music is giving artists a bigger cut compared to more traditional methods.

Re:Measly 12%? (1)

mechaZardoz (633923) | more than 11 years ago | (#6265270)

from the article: "Twelve percent is average, but successful bands often hammer out better contracts.' It's the 8% after other costs that are often deducted which the other describes as 'measly.'

Re:Measly 12%? (1)

zakezuke (229119) | more than 11 years ago | (#6265378)

The funny thing about lower distrobution costs, it does give an artist a bigger cut. 12% is a step in the right direction, but it's sad the fact that artists don't nessicarly have the following to justify not signing on with a label *yet*.

The sad thing is, i'd easily pay a quarter to a dollar for a good electronic copy of a novel.

hmm (1)

Datasage (214357) | more than 11 years ago | (#6265256)

What happens when artists self-produce thier own albums? the record labels get 0 cents. Besides P2P, i think this is another thing they dont want to get really big.

packaging costs!?!?! (2, Funny)

the-build-chicken (644253) | more than 11 years ago | (#6265257)

BMG, Universal, and Warner have announced plans to do away with such deductions for digital downloads.

awwwww, that's so thoughtful of them...kinda like a yacht salesman saying to you..."and just for you, I won't charge you for the tired"....wha tha?

So where's the credit card companies chunk? (3, Insightful)

Peter Cooper (660482) | more than 11 years ago | (#6265262)

Microtransactions have failed up to now because of the extreme costs involved in processing them. The credit card companies like to take a small flat rate fee and then a percentage on top. On amounts of a few dollars and up, the retailer can swallow this.. but on a buck? Regular deals with the credit card companies could end up with them getting about 40 cents out of the dollar.

Clearly Apple and chums have made some sort of special deal with the credit card companies, but there's no doubt there's a percentage coming out for the credit card companies.. and their chart just doesn't address it.

You could argue that it's the 'middlemen' section, but this is listed as going to subsidaries such as AOL and Amazon (in the case of certain retailers).. and I seriously doubt as if they'd fork over their whole share to VISA!

Someone with some real knowledge of merchant accounts in this capacity.. please fill us in :-)

Re:So where's the credit card companies chunk? (1)

Rylfaeth (138910) | more than 11 years ago | (#6265290)

Merchant accounts are usually set up so that these fees are deducted from the account that the funds are deposited into... so when I process a transaction and it posts to my account, I'm shown both a deposit and a withdrawl, the withdrawl being the processor fee. That said, I think the fees are tied into the 40 cents the site gets.
-Rylfaeth

Re:So where's the credit card companies chunk? (1, Informative)

Anonymous Coward | more than 11 years ago | (#6265303)

If you read up a little more on the music store, Apple does it's credit card charges in bulk. They don't do one for each song bought, but rather they bulk together the last 1000 or however many songs were bought and charge those. That was they can mitigate the fee. It's not that big of a deal if it's one charge per thousand or so songs.

In their chart, the cut for apple includes credit card usage -- because that's apple's responsibility to do. Seriously, your question is like asking "who pays for the recording? Recording studios get expensive!!" It's not like the credit card company is a partner in the music store. The chart divides up between the partners and those partners have certain responsibilities like paying the processing fees or the recording fees.

Re:So where's the credit card companies chunk? (0)

Anonymous Coward | more than 11 years ago | (#6265339)

So I can buy 999 songs and not get charged?
Sweeeet!!

Re:So where's the credit card companies chunk? (2, Informative)

euphline (308359) | more than 11 years ago | (#6265315)

Clearly Apple and chums have made some sort of special deal with the credit card companies, but there's no doubt there's a percentage coming out for the credit card companies.. and their chart just doesn't address it.


Generally, credit card fees come out of the retailer's piece of the pie. How do they afford it? We're only talking about 2-4%. Yes, 2-4%. What about the transaction fees? While many internet merchants do pay per transaction fees for credit cards, this is not a "requirement" of the deal. The CC companies have and do setup some accounts on a strictly percentage basis. I'm sure it's particularly easy to negotiate this when you're Apple and not joescomputershack.com... but it's not particularly a "special deal'.

Have doubt? Try googling for "merchant account 'no per transaction'".

-jbn

Re:So where's the credit card companies chunk? (0)

Anonymous Coward | more than 11 years ago | (#6265317)

I think it is called "cost of doing business"
It's the same as going to a grocery store and buying a $0.50 candy bar with your visa.
The real money comes from most of their customers buying more things.

Yeah, they probably take a loss on the people that only buy one song. But at least the one song got you in the store.

Re:So where's the credit card companies chunk? (1)

donutz (195717) | more than 11 years ago | (#6265377)

some stores will refuse to let you buy a $.50 candy bar with a credit card.

Suprised? No. (3, Insightful)

Anonymous Coward | more than 11 years ago | (#6265266)

This is why the record companies churn out the music they do. All they need is an ``artist'' willing to sing some and dance a little to bring in money. They recording industry money machine encompasses the studios, engineers, musicians, distribution, etc, and the money flow chart has no money going out of that process. They take in new money and recycle what they already have.

That's why I don't understand the tone of some people here. They seem to be waiting for the record industry to propose an acceptable solution to the filesharing fiasco before welcoming them back. The record industry, as a whole, exists to take money from you and me. If they have to destroy the computer industry to do it, they will. Instead of trying to work with the record industry, the nerds should be preparing lines of retreat. Versus the money we're facing, I don't believe we can win. Instead, we need to be working now on software tools and hardware tools that can be used without inserted DRM, etc. The hardware is especially important.

Same as album sales! (4, Informative)

sould (301844) | more than 11 years ago | (#6265267)

According to this [mikevisceglia.com] guy, artists only get 10%-12% of the cost of the CD.

And thats after paying for promotion. Depressing stuff.

Always get burned! (2, Insightful)

UcensorMe (651996) | more than 11 years ago | (#6265271)

When you make a deal with the devil, you will always get burned. Most artist are stupid about the deals they make and then bitch about gettin screwed. Look how these fools give away thier publishing rights.

I'd be pissed (3, Funny)

00Monkey (264977) | more than 11 years ago | (#6265276)

I'm a rapper and if I made it big, 12 cents wouldn't be enough...that's for damn sure.

Re:I'd be pissed (1)

mccoma (64578) | more than 11 years ago | (#6265296)

Might want to be your own label then, sell your own stuff, build an audience, and sign a deal more favorable to you (Motley Crue and MC Hammer went this route). Or hope you never have to sign at all.

Re:I'd be pissed (1)

deadsaijinx* (637410) | more than 11 years ago | (#6265307)

well, first off, there is your problem, you're a rapper. second off, if you made it big, and and got 12 to the dollar, then you would have plenty. do the math

Re:I'd be pissed (0)

Anonymous Coward | more than 11 years ago | (#6265308)

I'm a rapper and if I made it big, 12 cents wouldn't be enough...that's for damn sure.

Yep. Demand at least 50 cent.

Re:I'd be pissed (4, Insightful)

Graff (532189) | more than 11 years ago | (#6265343)

I'm a rapper and if I made it big, 12 cents wouldn't be enough

Oh really?

Well, let's say that you album only goes gold. That's 1 million albums sold, if you really made it big you'd most likely sell more. 1 million albums at $0.12 per song at let's say 10 songs an album equals $1.2 million in your pocket. Sure you have to pay tax, yadda yadda yadda but so does everyone. Do that once every 2 years or so and you'll make $600,000 a year. This is not counting other sales such as concerts, commercials, product endorsements, book deals, celebrity freebies, and all the other perks of being a star.

So is 12 cents sounding a little better now?

Re:I'd be pissed (-1, Offtopic)

Anonymous Coward | more than 11 years ago | (#6265373)

no it doesn't sound better to him, because he's 7 years old, and still shits his pants.

Re:I'd be pissed (-1, Flamebait)

Anonymous Coward | more than 11 years ago | (#6265363)

dats right muggafugga! MuggafuggN 12 cent not bees nuff fo sum rok.
N it not bees nuff fo sum muggafuggN waddymellon, O sum muggafuggN fryd chikN O sum muggafuggN 4Ts.

N I wans to bees putN sum mo gold teefs in muh mouf 2. N i bees wantn 2 puts sum mo gold sheet on muh muggafuggN Lincoon Nogivator [tnbsolution.com] ...
C da muggafugga rite heyah beeatch!

Gibs me sum mo money muggafugga!!

Re:I'd be pissed (1)

fartmaster (31343) | more than 11 years ago | (#6265376)

That's right, you would be 38 cents short of making it big.

hello and welcome to last week. (0, Troll)

prockcore (543967) | more than 11 years ago | (#6265280)

2003-06-16 17:35:03 How much do the artists really get from mp3 sales? (articles,money) (rejected)

How foolish of me, I should've waited a few days before submitting.

Re:hello and welcome to last week. (1)

deadsaijinx* (637410) | more than 11 years ago | (#6265344)

that's cuz we were busy with our 50th SCO post for the week and Moz 1.4 RC2. I mean, come on man. RELEASE CANDIDATE 2! It doesn't get much bigger than that

12 percent (1)

ruprechtjones (545762) | more than 11 years ago | (#6265282)

"the artists get a measly 12 cents for each download"

So that's twelve percent, this actually sounds higher than what they make off of CD sales. What's the big whoop?

Mesaly? (3, Insightful)

Devil Ducky (48672) | more than 11 years ago | (#6265284)

Considering that if you went to a store and bought an overpriced CD, the artist would get somewhere around 1-3 cents per CD; I don't think that 12 cents per song is a bad deal. I was quite surprised by how often, from Apple's claims, people are downloading whole CDs from them. Then I thought it out. $1 per song, 15 songs: $15 from iTunes; $20 from a store... plus I don't have to get up and walk to the car to drive to the store. Anything that saves you money while making you lazier will be a success.

I know a lot of people here are going to be mad that the record company is getting anything, but I also dont see a problem with that as long as it is the record company that's doing the work of recording, advertising, listing with iTunes, etc. It's what record companies are for, after all.

Re:Mesaly? (-1)

CyanideHD (132907) | more than 11 years ago | (#6265297)

The record company is doing the work, but how they are paid is from the cutting of the artists' paycheck.

And thats exactly how it should be (3, Insightful)

Anonymous Coward | more than 11 years ago | (#6265287)

When you buy a car, how much of that money do you figure goes to each engineer who was involved in designing it? Probably much less than the profit margin of the dealer or the car company. Now think about the modern popular music industry: It truly is built on huge economies of scale, and just like that car, every track of music you buy is the result of the work of many different people. The task of the "artist" themselves varies depending on the particular group, but as a general rule, they are more replaceable than a highly-trained engineer, and each has unique value mainly because of their public image, which is itself crafted by record company marketing departments. Nonetheless, probably no one person receives a larger share of this money than the "artist" involved, which is in many ways unfair considering the amount of effort put in by producers, recording engineers, and of course the marketing department, but obviously the market viability of the work depends to a certain extent on the presence of the artist, so the market rewards them with a greater share. These figures, in short, are simply proof that free markets are working well.

(of course, I leave it as an exercise for the reader to determine the share of the revenue from each song you pirate on Kazaa that goes to the artist)

Re:And thats exactly how it should be (1, Insightful)

Anonymous Coward | more than 11 years ago | (#6265380)

These figures, in short, are simply proof that free markets are working well.

HA ha. Yeah. The free market is really working great here. So great that we need a larger and larger and more complex patchwork of laws to hide that fact that these guys are all getting paid WAY too much. Free markets are supposed to be mostly self-organizing.

Having helped record a few indie albums myself, I think these big name producers and engineers and marketing departments need a 75% pay cut EFFECTIVE IMMEDIATELY. All you get is the name. There are 1,000 folks with the same exact skills who would kill for the job.

Free markets have very little to do with this.. it's a monopoly in action, keeping prices sky-high. Sure, WITHIN the rarified atmosphere of the music industry, this bears some resemblance to a free market, but that's like saying there's a free market in Communist China because the better beauraucrats and politicians in the party get the best government jobs.

Top Artists Balking At A La Carte Downloads (5, Interesting)

mechaZardoz (633923) | more than 11 years ago | (#6265295)

billboard article [billboard.com]

Despite the major labels' success in clearing hundreds of thousands of tracks for purchase online through services like Apple's iTunes Music Store, some top artists continue to resist authorizing the dismantling of their albums for Internet consumption as a la carte singles. Some acts are requiring that their music be sold exclusively in album bundles. For example, Linkin Park recently pulled its music as a singles offering from digital services. Sources say the band has expressed concerns about undercutting album sales. Other acts with similar stipulations about their work include Radiohead, Madonna, Jewel and Green Day, sources say.

Now, from an artistic standpoint I can see where they are coming from, there are certainly albums that must be experienced as a whole, or at least in the order that they were laid down. Still, I have to wonder whether they're not just shooting themselves in the foot; if the concern is over money lost to piracy, wouldn't 12 cents in the hand be worth it to an artist rather than 0? Eventually, they'll make the money back on volume; it seems they're too obsessed with immediate returns.

Same old story (1)

mharris007 (142886) | more than 11 years ago | (#6265298)

This news is not new. It has been known that for record sales and MP3 sales, that the artists generally pull in a very low percentage of the income made.

Just ask the good majority of music artists out there, that they make more money from their touring rather than their actual record sales (in this case MP3 sales).

This is how its going to be until the artists and the labels reform their relationship, but I have a strong feeling that this is not going to be happening any time soon. This sort of news always gets people wishing that the media industry was different, and gains a lot of sympathy for the talented artists out there.

Boo fuckin hoo (0)

Anonymous Coward | more than 11 years ago | (#6265301)

...and the artists get a measly 12 cents for each download."...

better then 0 cents a download from the friendly fucks of kazza no?

Business 2.0 (5, Funny)

ejaw5 (570071) | more than 11 years ago | (#6265305)

is this Business 2.0 "Full Speed" or "High Speed"?

Measly? For some, excellent for most (4, Insightful)

gad_zuki! (70830) | more than 11 years ago | (#6265306)

The article states that 12% is average. Only high-successful acts can do better and they are completely free not to opt-in to Apple's music store like Radiohead and Linkin Park have decided to do. [billboard.com]

Secondly, these are growing pains. 12% is excellent for a non-MTV/Clearchannel down your throat 24/7 mega-pop band. As diversity in the catalog continues and less money is funneled into four or five pop sensations, but instead funneled into exposing more artists then smaller advertising and word of mouth will produce more varied sales. Bands that start as nobodies and end as nobodies will be getting 12%. That's pretty good.

Personally, I think moving to singles and a diverse selection is a step in the proper direction to satisfy both fans and artists. We're going to look back to the days of big radio and MTV and not believe our rampant fandom and misplaced loyalties, not to mention taste.

Much better than albums (1)

AvantLegion (595806) | more than 11 years ago | (#6265310)

Royalty payements on albums for artists range from 5% to 15%. But the real bitch is how much of that 5-15% doesn't even get to the artist's pocket.

You see, after the recoupable costs (which are mighty, and include a "packaging deduction" which is around 15 to 20% of the royalties), then a good portion (half, according to some sources) of what's left is held as "reserve" to account for returned merchendise, etc! The "reserve" is (allegedly) paid back over 2 to 4 years, minus the expenses of returned CDs and stuff (and it's probably not a stretch of imagination to think of labels adding a "0" here or there to the actual figure of returns).

When you take away things like packaging deductions and reserves, the 12% from iTunes is a lot nicer than 12% from albums.

Seems about right (2, Informative)

Billly Gates (198444) | more than 11 years ago | (#6265316)

First off 30 + 40 + 12 != 100.

Anyway, 12 cents a song for a 12 track cd = $1.44.

I believe most artists make anywhere from $.75 to $1.50 per cd depending on the popularity of the artist. Yep you read that right.

Infact they get a bigger share because the RIAA does not have to go through a greedy retailer which charges $5-7 per cd, and no shipping or manufactoring costs are considered. Its the retailers and not the RIAA who make the majority of the outrageous prices. If the RIAA sells a cd for $11.99, the retailer will bump up the price to $18.99 and pocket the difference. Infact I believe they already do this. They only discount if the product does not sell well.

That is unless the artist is really big and has their own record label after their contract expires. That is difficult because most contracts require that the RIAA own the first 5-6 cd's. Mostly the big artists can afford to outsource to a small or indie label after many hits when the contract runs out. Metallica for example does have such a deal which explains why they sued Napster. They have alot more vested interest and their newer albums make a shitload more money for them. They do not have to have a huge record label to market for them.

measly = loaded comment (1)

computerme (655703) | more than 11 years ago | (#6265318)

so its 12%. guess what. that's more than a lot of authors get in book royalties. 10% for the creator of copyrighted products is the norm across alll IP industries.

What is the label doing? (2, Insightful)

ukyoCE (106879) | more than 11 years ago | (#6265320)

Does the label really do nothing more than provide $$ in advance (ie: an EXTRAORDINARILY high interest loan) and provide some of the contacts (advertising means, etc.) for the artist to spend the advance on?

Or now that all the radio stations and TV stations are owned by the same companies that own record labels, is it hard/impossible for an artist to get a decent deal on advertising without the media conglomerate's support?

oh I'm gunna get flamed for this... (2, Interesting)

the-build-chicken (644253) | more than 11 years ago | (#6265346)

ok...normal disclaimers apply here...I don't like stereotypes anymore than the next guy...but hey, they're a fact of life. You can, statistically, boil down a socio economic group to fit certain "patterns" and "trends"...like I said, not good, but usually true...so that's my disclaimer done...now onto my point

I have heard a lot of people talking about how RIAA will shoot themselves in the foot because the economies are changing...ie, people will just not pay $20 for something they can download for $2 (taking into account time costs etc)...and I'm thinking to myself...ok...so what really will happen

Ponder the following...and flame me if you think I'm off my rocker

1) To download songs...you need internet access, possibly an mp3 player to play them back...relatively technological savy...and the willingness to spend the time on the computer to get them...this to me, says middle to high socio economic (see above disclaimer before flaming)

2) Combine this with the fact that lower socio economic groups tend to spend more on entertainment (can't back up with specific figures right now...but I think it's a fair statement, and will be backed up by most retailers)

3) Labels will spend more money promoting artists and genres that give them the greatest returns...that's just common business sense

4)If your album doesn't get promoted by a label, at the moment anyway, you don't make it big as an artist...and your music dissapears apart from a few that 'discovered' you, and play you to their friends at parties

5)If I asked someone at a record company...I'm sure they could tell me exactly what kind of music each different socio economic category listens to (statistically speaking), and indeed, could probably break it down further to gender, race etc...I would also go further, and say that these different categories would have very dissimilar tastes in music....so, here's my thoughts (I'm sure a lot of you can already see where this is going)...

We download music...statistically, all within a few different genres....those genres stop being profitable...those genres stop getting promoted...those genres dissapear and get replaced with different kind of music...that appeals to groups that buy cds.....we bitch about how there's no good music anymore.

so...a question...through free market forces, and economics...are we really just shooting ourselves in the foot (over the long term), by downloading music we like???

(Humorous side note...maybe we should all go download some rap music today...consider it a national service)

Sure beats what farmers get (0, Interesting)

Anonymous Coward | more than 11 years ago | (#6265349)

A box of wheeties with a picture of Tiger Woods on the box: Tiger gets a dime, the farmers get a nickel.

oh.. so... still more than they make on CDs. (0)

Anonymous Coward | more than 11 years ago | (#6265357)

Typical artists get a less on CDs.. so how is this a bad thing?

At least it isn't worse than their current share. (1)

banal avenger (585337) | more than 11 years ago | (#6265371)

According to this article [britlinks.co.uk] , an artist already gets 12%-14% royalties on 70% of CD sales, and "each time a new format comes out, the percentage is cut further." So, at least in this case, it sounds like they're getting 12% on all sales â" some fare better, some fare worse â" and it isn't a smaller percentage like it has been in the past. Compared to other businesses, if someone else sells and markets your product for you, you don't get very much out of it.

That's not to say I agree with it, but I would think (although I have no proof) that an artist who runs his own label or is on a smaller label could get a larger cut from the label.

artists don't make their money from record sales.. (1)

xluserpetex (666816) | more than 11 years ago | (#6265384)

at least most of them don't. they make it from touring and merchandise. so if you really want to support an artist, see them on tour, and buy their stuff.
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