Higher iTunes Prices? How Much Goes To The Artists?
from the well,-how-about-that dept
Earlier this year, Apple finally agreed to strong pressure from the major record labels to introduce variable pricing on iTunes -- which officially would make some popular songs $1.29 and (in theory) also offer older, back catalog songs for $0.69. In reality, it's pretty difficult to find any of those $0.69 songs. However, as a musician, which would you prefer? Well, as Shocklee alerts us, most musicians might not see any of that additional fee (that report is a little misleading, though, in that it suggests -- incorrectly -- that all songs were driven up to $1.29). I have to admit that I'm a bit surprised by this, and wonder if it's really accurate. The telling quote in the article is this one:"Artists receive fixed residuals for music sales based on individual contracts via their respective record companies," says Max Clingerman, a music executive for MixJam Records who explains "the staggering price increases are not for the artist interest, rather intended for executive pockets."While I'm sure the intention was very much for exec pockets, I was under the impression that most major label contracts included royalty rates based on retail price. And while most signed musicians never recoup their advance, and thus never see any royalties whatsoever (no matter what the price), I do wonder if it's really true that musicians don't get a larger cut of higher priced digital sales (at least in the fictional accounting systems the labels use).
Of course, the larger point made by the article is almost certainly true. In increasing the price to $1.29, the demand for such songs has been driven down significantly, leading people to look for alternative sources for the same music.
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Its true....
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Poor Executives
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Amazon has some great deals...
I don't work for them, just a happy customer.
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Re: Its true....
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Another Day Another Outrage
Their public flailing and thrashing about is truly enjoyable and I find myself checking TechDirt every ten minutes or so anticipating the next amusingly intemperate outburst.
I am mostly annoyed by people who feel they must maintain absolute control of every particle of their little fiefdoms, and so their frequent tantrums and lamentations are a joy to my heart.
Merry Christmas, Happy New Year and Keep 'em comin', Mike!
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Re: Another Day Another Outrage
Feh...
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If they were instead aiming to sell volume, at say $.10 a song, there's your piracy problem solved, and they're back making money. I just don't see why they don't do it -- anyone care to enlighten?
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Re: Amazon has some great deals...
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Considering all the time, effort and people it takes to write, rehrearse and record a song - not to mention publicize it - a dollar is a pretty reasonable price. It's also the cheapest anyone's ever been able to buy a song in decades (CD singles cost a minimum of $5 and 45 RPM singles before those were about $3).
So complaining that the lowest price for music in fifty years is STILL too much means you're selfish just want everything for free.
Just because you WANT 100 songs and you don't want to spend $100 doesn't mean it should cost less - it just means you have to spend more or you buy less. Like I did when I was shopping at record stores and had a stack of $15 CDs I wanted.
If you want 5 cheeseburgers instead of 2, do you think they should lower the price of cheeseburgers to accomadate your gluttony?
Give me a break. Anything less than a dollar a song begins to border on insulting.
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Re: Re: Another Day Another Outrage
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Re:
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Re:
Music copies are unlimited and have no cost after the initial development. Each cheeseburger has a production cost, and profit must still be made.
A consumer spending $100 on 77 songs is supporting the artists AND the music industry execs only as much as a consumer spending $100 on 1000 songs, except the consumer with 1000 songs is going to be significantly happier, and most likely return in the future.
Also, CDs and 45 rpm singles have production and distribution costs, online digital copies don't.
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Re:
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TunesPro?
20c sounds way too reasonable for songs, though, since the evil hand of the recording industry would simply not license its music for so little. Heck, I almost broke down and bought a couple of albums right there (I dislike paying for music downloads, so all the music I buy is in good ol' plastic discs which actually cost money to make). Of course, when something seems too good to be true... Some quick googling seems to imply that there's no official backing to the site (for instance: http://routenote.com/blog/tunes-pro-new-download-store-that-wants-to-be-the-next-allofmp3-com/). An easy giveaway is their The Beatles portfolio.
So, however little the labels pay their artists, these guys would be the height of hypocrisy in decrying that and then selling music for which no artist will receive any money at all. I sincerely doubt they are the Robin Hood of the modern age, sending unsuspecting artists checks for their troubles while skipping over the record labels. More likely, their business model is "Take the Money and Run"¯. So if the claims they make about artists not getting their due are true, it would only be a happy accident within their PR game.
Let me know if I'm terribly off the mark here, and this is actually somebody who's figured out something closer to what people want.
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Re:
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Typical artist royalty rates for permanent downloads + dynamic pricing
However, lower prices may impact more than the royalty base price, since most artist agreements provide for a reduced percentage royalty rate on midprice and budget records. So, if your normal rate is 20% of wholesale and your download becomes a "budget" release, you may receive only 15% of the low "budget" royalty base price. (I won't get into discounts because that is too complicated.)
What may not change regardless of price are mechanical royalties for permanent audio downloads which are payable to song publishers. For example, the statutory mechanical royalty reportable for many songs is currently $0.091 per permanent download, regardless of the price. This is why many record companies do not license music to eMusic or other "all you can eat" services (because the liability to publishers could theoretically exceed the record company's revenue).
But I digress...
While I can see why it is in the best interest of many artists to make their music to be available at the lowest possible consumer price, one size does not fit all. Dynamic pricing for permanent audio downloads is an opportunity to increase profits for all parties, except maybe publishers and songwriters.
Other products are dynamically priced, so why not music?
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Re:
A song is just a few MB of data these days. All they have to do is record it once and sell it to me over the internet for a reasonable price. If the record industry can't do that because they're a stunned dinosaur just waiting to die, then at the end of the day the artists are in trouble and I get no music.
So, I think the public is making a statement, loud and clear. Some don't care to listen to music any more, many go as far as to risk getting it illegally. The ball is in the artists' court, and they should just bite their lip and dump the record industry once and for all! We need lower prices, because (with all due respect) copies of songs from the internet are not really worth *anything*, no matter what they cost to make.
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I wonder if Jeff Bezos ever dreamed where Amazon.com would end up. In the last month, I've bought water filters, air purifier filters, an SDHC memory card, and dozens of other items directly from Amazon, on top of any book and music purchases.
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Re: Typical artist royalty rates for permanent downloads + dynamic pricing
[of course it all depends on contract specifics between iTunes and the labels]
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Re: Re: Typical artist royalty rates for permanent downloads + dynamic pricing
Record companies get about 70% of the iTunes retail price.
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Re: Its true....
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I don't use or need iTunes
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Re:
The only thing that is "insulting" is thinking the high-and-mighty artist can charge more than the consumer is willing to pay because it might "insult" them to be paid less.
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Quality
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Quality redux
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Do the math
When the CD when into the mainstream consumer purchase frenzy the record labels got rich... and I mean mega rich while the artists also benefited from a sudden rebirth of their income (take any artist who republishes albums based on their hits...Rod Stewart anyone) but while the record labels where getting mega rich and having lavish drug fuelled parties they took their eye off the ball.... Suddenly the CD burner was becoming popular in the dorms of universities and music piracy became a mainstream business opportunity for any budding student (and I'm sure some of those pirates where setup for life on those dishonest earnings) Also their was the corrupt world of radio airtime that then closed down....
And then come the digital age.... and the labels ignored it.... and ignored it.... and are still trying to ignore it.... Why? Well for the past 50 years they have dealt with tangible product, something that needs to be manufactured, packaged and distributed, now artists can self publish and self promote taking 100% of the income.... Look at what Radiohead did and I'm sure others followed.
The artists today, much like movie stars should be signing contracts that allow for them ti take pride in their work and gain the royalties for their efforts, not take an advance in a hope that they may get rich if they do well...
If you took a major artist, lets say U2, yes they could take a huge advance because their label knows they have millions of fans who would buy the music, but what if they themselves said, you know what I want people to be happy with their purchase and pay for what it's worth....
So as to the $1.29 debate, I actually thought that .99$ was too much as when you do the math on it, if an album has on average 12 tracks you would be paying 12 bucks for it, yet go onto Amazon and buy the CD, packaging and all for less that it costs digitally, and you know what, when your computer crashes that CD is still on your shelf, and you know what, want to put that CD into as many devices as you like and you can.... DRM, Digital and high costs really do fuel the piracy game.
I closing thought for the labels is to get in touch with your mass market consumers and listen to what they expect because until you meet their needs piracy will keep holding you hold.
(oh and the poster who said .10$ is a little unrealistic but I get where your coming from, if 10 million happily buy the song for .10$ then that is 10million who would probably go back for seconds, if 1 million buy at $1.29 then you may only have 300k go back for seconds...
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Re:
They know they're selling at 99 cents, so they stick with that for the most part. The move to $1.29 is pretty inexplicable though.
Wow, it's kind of weird trying to think like a music executive.
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Re:
You should read his post again. He didn't say he wants to pay less for his music. He said that, in his opinion, the labels would make more money charging less per track. He's probably right.
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I stay with Amazon
If the price across the board had been $15 for DIGITAL download than it just wouldn't have happened to be honest.
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Re: Poor Executives
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Re: Re:
Check out how amie street works. start sales at a penny and work your way up ...
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The difference between the CD rate and the compressed isn't the most critical thing to sound enjoyment. How it's mastered is more important. There is still a big problem of sound loss when converting from analog to digital. It generally kills half the sound.
I suggest HDCD is a good solution.
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Re: Quality redux
Uhh, yeah, the point was that the person I was responding to was claiming that artists should get to ignore what the market will bear because...they're artists and might be insulted if the market wants to pay them less.
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Re: Do the math
"I closing thought for the labels is to get in touch with your mass market consumers and listen to what they expect because until you meet their needs piracy will keep holding you hold."
The labels getting in touch with the consumers isnt going to happen. Go to any musicians blog that has an open policy (ie doesnt delete every anti RIAA and anti label comment) and read some of the comments you will see why. The majority of the comments are far off to the Die RIAA Die, Label side, of the picture. The labels are off to the other side where they circle their wagons amd have surrounded themselves with people who tell them we can fix this, everything is going to be all right. The problem with listening to the people who only tell you its all going to be fine is, the ship actually isnt unsinkable....
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when was the money..
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Re: Re: Re:
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Bezos's dreams
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Re: Poor Executives
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Re: Amazon has some great deals...
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Re: Re: Won't pay one dollar for a snog?
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