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How iTunes Hurts Weird Al
Posted by
samzenpus
on Wed Jun 14, 2006 10:35 PM
from the eat-it dept.
from the eat-it dept.
Johnny X writes "Weird Al Yankovic recently said he makes far less money when you buy from iTunes than when you buy an actual CD. This guy did the math and showed that Weird Al could be losing up to 85% of his record sales income due to the 'weird' ways the record companies compute digital sales. Are all artists getting the shaft like this?"
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News: Weird Al Premiere Cancelled Due to Net Leak 266 comments
SilentChris writes "In what's probably a first, AOL cancelled the 'World Premiere' of Weird Al's newest video 'White and Nerdy' due to it being leaked on the internet. Al writes on his MySpace page: 'Apparently, the video has already leaked online, and AOL doesn't feel comfortable doing a World Premiere promotion for a video that a number of people have seen already ... Anyway, it's really a bummer... it would have been great promotion for the album... but hey, life goes on.' As for the video? Arguably Al's best work (but I'm a little biased)."
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Still getting the raw end of the deal? (Score:5, Insightful)
Re:Still getting the raw end of the deal? (Score:5, Insightful)
I know you all hate the labels, but it doesn't make sense to assume they're stupid. They may be greedy, exploitive and unfriendly to their own customers, but "stupid" would not be a word I would use to describe them.
Weird Al said that he didn't really "get" the part of his contract that gave him far less money for digital downloads. He signed it anyway. That tells me pretty clearly that what Al didn't really "get" was the business of digital downloads in general. If he had, he woul have realized that paid downloads are increasing at roughly the rate of iPod sales and those iPod sales are through the roof. If he "got" digital downloads, he would have realized that 5 years from now digital could easily be a bigger business than CD.
The thing is, his recording label did get it. They got it so well that they presented him a deal that looks pretty good now, while CD sales are still king, but will totaly bite ass in the near future when downloads are more common than CD sales. Yes, they're little better than the slickest of con men who will tell you exactly how they will get your money in the same breath that they con you out of it, but stupid? Hell no. They're in charge.
TW
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Re:Still getting the raw end of the deal? (Score:5, Informative)
It's kind of funny that the names of the companies involved haven't been mentioned, so I'll go ahead and do that: Al's current label is "Volcano" which is owned by "Zomba" which is owned by "BMG" which, of course, is part of the "Sony/BMG" ubercorporation...OMGWTFBBQ, I just realized! This is yet another anti-Sony story!
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Time for a new song (Score:5, Funny)
Re:Time for a new song (Score:5, Funny)
That's me on their ipod
That's me on i - tunes
Losing my comission
Trying to keep up with tech
And I don't know if you can do it
Oh no you took too much
I haven't got enough
I thought that I heard price-fixing
I thought that I heard you steal
I think I thought I got ripped off
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Cuplrit? (Score:5, Insightful)
Re:Cuplrit? (Score:5, Insightful)
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Re:Cuplrit? (Score:5, Insightful)
Agreed. Here's what I understand.
A consumer buys a record on iTunes for the flat $10 price. Apple takes its cut (30% or $3.00) but gives the rest to the record company. The record company takes out costs and then gives the artist a small percentage. For our example, let's say 10% or $0.70 goes to the artist.
If the consumer had bought a $10.00 CD instead, the record company would still take the same of costs in terms of percentage but Apple would not have taken the first piece out. The artist would have gotten $1.00 in royalties.
On the surface, it seems contradictory that artist would get less with iTunes and it would seem that Apple is to blame. The real culprit is what the record company considers as "costs." Every contract allows the record company to take out costs before royalties are paid. Traditionally the costs for the record company were things like distribution, marketing, and packaging for CDs and tapes. These were not minor costs.
But in terms of digital downloads, Wierd Al (and other artists) are complaining that the record companies are taking out these traditional costs as if the work had been sold as a traditional CD or tape. What the record companies are doing are simply taking out the same percentages insteading computing the real costs.
If the record companies had computed real costs for distribution and packaging for a download, it would have found that they are next to nothing. The artists should receive more. This is due to either the record companies not updating their accounting to deal with digital medium or purposefully shorting the artists. As a pessimist, I would think the latter.
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So what's new? (Score:5, Insightful)
Re:So what's new? (Score:5, Informative)
They already do, actually. Read up on record contracts sometime. Many artists end up in massive debt due to their contracts and have to tour endlessly to pay it off. Fuck major labels. I'd trust Satan before I trust a record label.
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Re:So what's new? (Score:5, Funny)
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The Shaft (Score:5, Insightful)
Musicians will continue to "get the shaft" as long as they rely on majors.
Re:The Shaft (Score:5, Informative)
One of the best references on the subject: Courtney Love Does The Math [jdray.com].
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Re:The Shaft (Score:5, Informative)
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Slashdot is going to hate this... (Score:5, Insightful)
Whoever the record labels SAY should be on the radio or MTV.
So, no reason to pay the artists anything - if the artist you're talking to doesn't want to take a small percentage of the record sales, then you just find somebody else who will, make THEM the star, and then they can rake it in on concert ticket sales.
People do not understand that pricing has NOTHING to do with what it costs to provide a service. It has to do with what people are willing to pay to get a service. And most new artists are willing to pay the vast majority of their record (or download) sales to have the services of a record label.
Also, the article is wrong about WHO is getting the artist's money. The money the artist isn't getting isn't going to the LABEL, it's going to the CONSUMER:
Price of Al's CD on Amazon: $14.98
Price of Al's CD on iTunes: $11.88
That's a difference of $3.10. Al 'apparently' loses $0.27 per song (not $0.265, article has rounding problems). $0.27 x 12 = $3.24!
So, when Al comes up short $3.24 because a consumer got an album for $3.24 less on iTuns than on Amazon, who got that $3.24?
The CONSUMER did!
Now, I'm not saying this is FAIR. Clearly, the record label is making much more money on iTunes sales since, as mentioned, they don't have to pay for a lot of things they would if they distributed music by physical CD. But... why should Al get any of that? Al has agreed to pay the record company a certain amount for the record company's services. The record company gets the same amount whether the CD is sold online or on the shelves. If Al doesn't want to lose money to his stuff being sold on iTunes, he should renegotiate his contract to not allow iTunes sales. I bet most artists wouldn't do that though, because they make most of their money on concerts, and being on iTunes helps them sell tickets.
The *REAL* problem here is not that Al isn't getting more money. The real problem is that the CONSUMER is still paying the record company CD distribution prices instead of digital distribution prices. In a free market, we would expect digital downloads to be much cheaper than $0.99, because the various distributors would compete against each other reduce the inflated margins the record companies (and iTunes) are getting based on CD priving. But since iTunes is a fairly insulated monopoly at this point, even though the CD *COSTS* of distribution have gone away, the CD *PRICING* hasn't.
So, who is REALLY at fault for the artist getting no money AND the record company and iTunes still getting full price?
APPLE! They've set the $0.99 price and are putting no pressure on the record labels to lower it.
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Read it on "Wierd Al's" actual website (Score:5, Informative)
Re:Read it on "Wierd Al's" actual website (Score:5, Insightful)
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apples to oranges? (Score:5, Insightful)
Community based business model? (Score:5, Insightful)
I remember reading a UNDP [undp.org] report a while back on the development of countries in Africa. The researchers observed that the international market prices of commodities such as coffee or sugar were higher then than at any time in the past, and yet in the last few years the prices payed to the small farmers was at its lowest point in the past 60 years.
The reason for this apparent contradiction was the fact that small farmers can't sell their wares directly to the final consumer who brews coffee at home. Rather, this coffee is bought up by one of a handful of multinationals, who because they are so few, more or less dictate prices to the farmers, and then sell it on to the consumers. The fact that there are few of these middle men puts them in a position of power which allows them to make off with the king's share of the profits, and indeed they absorb the price hikes.
Maybe its time musicians got together and set up an electronic coop to sell their music the way farmers sometimes set up "farmers markets". They could have more control over their prices, and how much of what consumers pay goes to them.
Shouldn't the internet be making it easier to cut out the middle man like this?
Steve Vai said the same thing a couple of years ag (Score:5, Interesting)
Here's an excerpt about iTunes in particular:
For instance, If you go to Itunes and download a song for $.99, Apple retains about $.34 and the label receives about $.65. Labels then calculate a royalty base price to apply to the artists deal points. Following are some of the deductions:
a. A packaging fee (container cost) of up to, and sometimes more than, 25%. That's 25% of retail which is $.99 equaling about $.25 (by the way, there is no packaging on a digital download).
b. A 15% deduction for free goods. That's an additional $.15 or so. (There is usually no free goods with digital downloads unless someone is ripping it from the net.
That leaves a royalty base price of close to $.60 per track that the artists royalty is calculated against. If an artist receives 15 points in their deal (and remember, that's a very good deal) then he is entitled to aprox. $.09 a track. This is then cut in half because of the "new technology clause" that is incorporated into most deals. The artists royalty is then calced out at $.04-.05 a download and from that, 100% of it is withheld by the label to go towards recoupment of any advances to make the record, advances in general, tour support, radio promotion and other things in some cases. Most managers and producers are paid from record one and are paid regardless of the expenses, leaving the artists with even more of a recoupment burden before they start to see any income.
IOW, freakin' artist needs to be extremely lucky to see ANY of the money, ever, despite the fact that it's his work being sold. OTOH he may be able repay his debt to the label - this is something they won't be able to do if their stuff is sold through allofmp3.com.
Re:eat it eat it (Score:5, Informative)
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Re:eat it eat it (Score:5, Interesting)
For example, with web/digital radio. RIAA bought off Congress so that they could collect royalties for all music played over webcasts. Guess what, my friend's band whom I'm the manager for...never got to negotiate.
RIAA is !@#$% up....
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RTFA (Score:5, Informative)
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Re:New name (Score:5, Informative)
He's not the greedy one here.
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Re:Weird Al, an Artist? (Score:5, Insightful)
Al's not really complaining. Someone asked him what medium gets him the most money, and here's what he had to say:
He's a little sarcastic about it, but that IMO doesn't come close to "complaining".
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