How iTunes Hurts Weird Al

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?"

Still getting the raw end of the deal?

Is the RIAA still in charge?

Re:Still getting the raw end of the deal?

Forget the RIAA, Weird Al's record label is definately the entity in charge.

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

Re:Still getting the raw end of the deal?

It's been said before, and it has to be said again--the RIAA is merely a lobby group that represents the labels. The RIAA has nothing to do with Weird Al's contract; his label does. People have been mindlessly referring to "the RIAA" for so long that they think it's interchangeable with the music industry and any and all record labels.

This is a contract issue between Weird Al and his label. However, I expect most of the Slashdot discussion to devolve toward another generalized music industry bashing session instead of focusing on the actual topic here of Weird Al and his label contract...

Re:Still getting the raw end of the deal?

For good or for ill, the RIAA has come to stand for the music cartel in many people's minds. Call it the flexibility of language or the laziness of human mind, but when someone says RIAA, I don't just think of the lobbying organization, I think of the cartel.

I commend you for fighting for precision, but in this case I think you're trying to piss into the wind.

Re:Still getting the raw end of the deal?

but when someone says "stealing", I don't just think of shoplifting, I think of copying a song from a friend.

or, lord knows, whistling a tune, or even sitting in silence.

Re:Still getting the raw end of the deal?

Forget the RIAA, Weird Al's record label is definately the entity in charge.

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!

Re:Still getting the raw end of the deal?

So the money that Al's not getting might have gone to the rootkit programmers?

Step right up ladies and gents. Getcher tin foil hats here. Can't be a conspiracy theorist without the tfh.

Re:Still getting the raw end of the deal?

Weird Al said that he did not understand the reason that the contract was written to get him less money from online sales. He did not say he did not understand the contract, but rather the reasoning for it. In his words [weirdal.com]:

This is the one thing about my renegotiated record contract that never made much sense to me. It costs the label NOTHING for somebody to download an album (no manufacturing costs, shipping, or really any overhead of any kind) and yet the artist (me) winds up making less from it. Go figure.

Re:Still getting the raw end of the deal?

In America, where I'm pretty sure he signed it, the responsibility is on you, not anyone else, to make sure you understand your contract. Unless he is mentally handicapped and they were clearly taking advantage of him (which is not the case for him) then he had every opportunity to keep asking them until they explained, or hire a lawyer to explain it to him.

He makes more money than most people ever will, I don't feel bad for him because he's too dumb to make shitloads more.

Have you ever seen a record contract?

Have you ever seen a record contract? I work in the recording industry and I have.

They are usually about 70-90 pages of small print which are "the result of the accumulation of thousands of lawsuits through the years".

These contracts are written to minimize liability for the label and obviously maximize return. However, there is always a "this contract applies to any current, future, or past medium of distribution, seen or unforeseen etc..." clause written in. It is up to the artist and his attorney to negotiate that out of the contract if they feel the need to.

Re:Still getting the raw end of the deal?

Musicians are not typically very business savvy people. There are exceptions of course, but it's a general rule. Even a successful musician is unlikely to be able to afford more than one lawyer and one accountant. The labels on the other hand have vast teams of people insuring that they squeeze every cent out of their talent and customers. The record industry has been pulling this kind of sneaky contract shit since the 20s to rip off talent.

Re:Still getting the raw end of the deal?

Even a successful musician is unlikely to be able to afford more than one lawyer and one accountant. The labels on the other hand have vast teams of people insuring that they squeeze every cent out of their talent and customers.

Why does this always become an explanation? I don't get it. I'm not a lawyer, but when I signed an employment contract, I read it over first, line by line. When I signed a loan contract, I read it over first. When I have *any* contract in front of me, I take the appropriate amount of time to read it over, mark *anything* I don't understand, and then research it. It takes a ton of my time up, and people even get pissed at me taking too long sometimes. But you know what? I know what I sign, and I agree with what I sign. If I don't, at the end of the process, I won't freaking sign it.

Do the damn research before you sign a contract. I have no pity for anyone who's signed into a bad contract. I've done it once, because I was in a hurry, but my one rule is that the contract is either limited, or there's an acceptable way out.

Re:Still getting the raw end of the deal?

'but "stupid" would not be a word I would use to describe them.'

Of course, by engaging in the rampant exploitation they do they undermine any reason for the law to protect their monopoly rights, effectively proving that the artists and creators would be better off with a pure taxation/incentive construction, and letting the free market drive prices on distribution, marketing and production.

Sawing off the branch you're sitting on falls squarely under the heading "stupid", in this case, greedy-stupid, as their long term prospects arent particularly good.

Raw end...hah!

But, here's my thing. Saying that a wildly successful artist (like Weird Al definitely is) is aggrieved by a distribution that, OMG, reduces the profit per sale of his songs, is like saying that professional baseball players are aggrieved when there is a absurdly high salary cap installed; yeah, its technically true in the sense that they aren't quite as filthy rich as before, but I won't weep that much for them.

OTOH, there are those artists, let us call them the 'filthy rabble (tm)' who aren't successful, and under normal circumstances wouldn't generate enough sales potential to justify to a record label the cost and risk of publishing their work. For these folks, an electronic distribution model is the only likely way for themto ever hope to get content to potential consumers.

Point the third, its not like sucessful artists don't have leverage when dealing with major labels. Volcano, which is Weird Al's label, was embroiled, for example, in a contarct dispute with Tool, another wildly successful band. Tool, after a protracted argument, prevailed in most of the ways that matter. Artists can leverage their potential future sales to benefit them in contract negotiations, and they do it all the time.

There is plenty to complain about in the music industry, and the RIAA and the labels on behalf of whom they lobby are in many ways foolish in their relatively unenlightened pursuit of bare self-interested greed, but this, I do believe, is not a good example of that trend. It is simply a successful artist going through the relatively painless 'pain' of adjusting to a new distribution paradigm. There are better thinsg to complain about (like pushing very short sighted DRM schemes that treat all customers like would-be criminals rather than treating them, oh I don't know, well). P.S., I like Weird Al's work; he's a hell of a satirist.

Re:Raw end...hah!

Sorry but you're wasting your time. Only musician-victim vs corporation-bully views are allowed here.

You have to remember, musicians are poor feeble minded creatures who are lured into dark corners by executives in suits to sign their filthy contracts. They shouldn't be expected to prove their talent up front and build up capital and resources like the rest of us, they're special.

Re:Still getting the raw end of the deal?

1) Great Singer
2) Very clever paraodies.
3) Albums contain a slew of hilarious original songs as well.

Time for a new song

Sounds like a good opporitunity to write an R.E.M. parody... "Losing my Commission"

Re:Time for a new song

...
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 ...

Re:And if you want to be really charitable

Nope.

In fact, by even posting it on Slashdot, they've pretty much ensured that Weird Al would never make the song.

From the FAQ section of his site (http://www.weirdal.com/faq.htm [weirdal.com]):
"Can I send my song ideas to Al?

Sorry, for legal and personal reasons, Al does not accept song ideas from fans (he's got plenty warped ideas on his own!) You might try following in Al's footsteps by recording your songs and sending them to Dr. Demento - maybe you'll hear yourself on the radio!"

I've never met him, but I'm told that he's a really cool guy (a family member of mine who was working security at one of his shows talked to him for a bit). And of course, being the diehard fan that I am, I have quite a few of his albums.

-- Joe

Re:eat it eat it

He didn't seem to be complaining. He merely said he didn't understand why they want to take more out when there are fewer distribution costs.

Re:eat it eat it

Actually, a lot of artists never got to sign for digital.

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....

Re:Well duh

If people don't like the price they can go without. That's your system is it? How about competition?

Um, I didn't say go without music. I'm saying go without the artists whose music you think is too expensive. Go with artists who are cheaper. Competition is there; artists compete with each other for fame and fortune. You have a choice between them, and you base your decision on (A) the quality of their music and (B) the price of their music. How is this any different from other industries where competition thrives? You might think that a Ferrari is a nicer car than a Toyota Camry, but you "can go without" the Ferrari because the Camry is cheaper.

If the record companies were required to license their songs to multiple manufacturers and you had a choice between which of them you bought the CD from you don't think the prices would be lower?

What would be the point of this? Record companies would simply license the songs at "high" prices, and then the CD manufacturers would pass the cost on to consumers.

Cuplrit?

TFA seems to blame iTunes, at least at heart. Wouldn't the actual problem here be the messed up, backwards, hacked way the (MP|RI)AA have decided to handle this newfangled technology called the internet?

Re:Cuplrit?

Actually, I thought the analysis seemed to blame everybody: iTunes for charging 30+ cents per dollar for their web services (that surely does seem high, which makes me wonder if the mentioned 80/19 split isn't more accurate), the record company for not splitting their cut more fairly with the artist, and the implied blame of Al for signing what seems on the surface to be a pretty lousy deal.

Culprit

If you are going to say something like that, please actually read the article.

"Apple did work, and got paid for it. You did an arguably larger portion of the work, by creating something people wanted to buy in the first place, so Apple got a little money, and you got a good deal more."

He is saying here you did work, they sold your work, they take a cut and pass the rest back. Fair enough. However he goes on to say "Unfortunately, that's not how this version of the universe operates. So Apple sends the check to your record label."

And he then goes on to discuss where the money goes to the record label.

The conclusion he reaches is basically "If all of your fans bought through iTunes rather than buying CDs at the record store you'd be looking at an overall reduction in income of 85%!" however he is quite clear through the article that the record companies take a lions share of that money

Moving from fact into speculation, let's examine what's happening here

Case 1:
Man records songs, Record label puts work into creating CD labeling, packaging, promoting and so on. Record label organizes with Distribution company to sell CD's and gets money in return.
Cost of Final Product: $15-$20.

Case 2: Man records songs, Record label puts work into creating CD labeling, packaging, promoting and so on. Record label organizes with itunes to use all the fancy stuff they created for the CD and sell the product over Itunes.
Cost of Final Product: $0.99 * songs or $10, whichever is less

The same costs are involved in doing both. Until artists only release online, the CD cost will have to be recouped as well anyway, so it shouldn't be a huge shock to anyone that the cheaper product provides a worse return on investment for the same work.

Re:Cuplrit?

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.

So what's new?

Record companies find ways to give artists even less money. You knew it was going to happen. To the record companies, it is not about the music, but the money. Since the early days in the 50's they have been writing draconian contracts, then stealing the copyrights from the artists (remember the "musicians are craftsmen not artists" argument they were throwing around) and now this. Pretty soon, the artists will have to PAY the record companies for the priviledge of getting screwed.

Re:So what's new?

Pretty soon, the artists will have to PAY the record companies for the priviledge of getting screwed.

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.

Re:So what's new?

Satan runs a record label.

In Satan's defense...

...they do put out some good albums.

The Shaft

Isn't this interesting, after all the noise the industry made about going after illegal music downloads, all in the name of helping the artists. They then turn around and pay the artist next to nothing for the iTunes download you are supposed to buy because you want to 'support the artist'.
Musicians will continue to "get the shaft" as long as they rely on majors.

Re:The Shaft

Musicians will continue to "get the shaft" as long as they rely on majors.

One of the best references on the subject: Courtney Love Does The Math [jdray.com].

Re:The Shaft

I would also recommend Steve Albini's piece The Problem With Music [negativland.com].

Re:The Shaft

I don't believe in a free market, because "free markets" invariably transfer control from a (largely) unrepresentative ogliarchy of politicians to a (totally) unrepresentative ogliarchy of corporations. Yeah, I know, vote Cthulhu - why go for the lesser of two evils? The "free market", as implemented, needs so many constraints and so much oversight in order to prevent it from degenerating totally that it's not meaningfully free anyway. It's better than a lot of alternatives, but that's only because the alternatives would make a satanist green with envy.

Really, there is almost no real way of supporting an artist. There are way too many hands dipping into their pockets. That's possibly why labels were so keen on artists getting high on drugs in the 60s and 70s - easier to steal from, if they're not concious. Even adding a token of appreciation in fan mail would be unlikely to get through. Whoever has been hired to answer the mail would be more than able to lift it without anybody being any the wiser.

If there's a workable solution, then it will require some major restructuring of how things are done. The existing mechanisms don't cut it and cannot be patched to cut it.

Slashdot is going to hate this...

There are very few people who actually have any taste in music. The vast majority of music purchases are made by shleps buying whatever is on the radio or MTV. So who is on the radio or MTV?

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.

Read it on "Wierd Al's" actual website

Submitter's (?) blog references this, but here is Weird's Al's website [weirdal.com] where he actually talks about it ... his response on this topic is the 4th bold one down.

Re:Read it on "Wierd Al's" actual website

In cases like this, I'm all in favor of the editors modifying the submitter's links. Not only does Aaron Hockley's blog offer no more information than what he submitted to Slashdot, but in his "Blogging" cattegory he clearly states that he's actively engaging in this sort of activity for his own personal benefit (don't bother, it's not worth the look nor the additional clicks to his 'blog').

apples to oranges?

Even if Al is making less per song, does that mean anyone who bought one of his songs or records from iTunes would've otherwise purchased a brand new CD? Or might they have bought a used one, or none at all?

Hah

Nice to know that the distribution medium with essentially no production or distribution costs screws the artist in favor of the distributor.

Help a guy out...

Check out his short-lived TV series:

The Weird Al Show DVD [amazon.com]

It's surprisingly good, if you check out the clips available on youtube [youtube.com].

Oh, and yeah, can't forget one of the most underrated, quotable comedy movies of all time: UHF [amazon.com].

Ryan Fenton

Community based business model?

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?

Poor Al

Im curious now if he's talking about the percentage he gets or if he's talking about volume. In other words, is he making less because people just buy the songs they want?

If it's the former, well the RIAA just plain sucks. (I'm sure this will be heavily covered before this topic is closed so I'm not going to bother being more eloquent.)

If it's the latter... sorry Al, I think you're talented and love your music, but that's supply and demand, man. If iTunes means a fairer price for all involved, then I'd ask you to take it in stride. The RIAA had quite the gold mine going there, and I don't blame them for trying to maintain it, but we legit customers were getting gouged.

He's not getting ripped off

... and I don't feel sorry for him in the least.

I like Wierd Al, and even own a few of his CDs. But today, there is absolutely no reason for ANY musician to be beholden to a record company with a draconian contract that pays them practically nothing. The cost of recording equipment is a tiny fraction of what it was 20 years ago and the internet allows artists to sell their work directly to the public with no need for a record company to handle distrubution and take their 99.9% cut.

There is no reason why Wierd Al (or any other musician) can't record his music in his own studio, have the CDs pressed (there are companies out there that do it for $1 per CD) and then set up a website to sell the CDs as well as digital downloads. He gets 100% of the profits, we get to hear the music and the RIAA goes out of business.

Re:He's not getting ripped off

There are a couple possible reasons they can't do what you say.

In Weird Al's case, he very well may be in a "you produce x number of albums for us" contract and only partway through. So he's contractually prohibited from going independent.

In the case of a new artist, you have to admit that the record companies DO do stuff to get you exposure. For instance, it's VERY hard to get on most radio stations if you don't have support from the labels.

Does this surprise anyone?

CDs cost about $15-$20. The record label takes most of it, and the artist gets a little cut. iTunes CDs cost about $10. Apple gets a moderate cut (only about a third of what you pay), the record label still gets the lion's share, and there's even less of a smaller pie left for the artist. Apple benefits - they don't pay the costs associated with producing the music, their cut is enough to maintain the fairly high bandwidth and server costs to keep the service running and turn a small profit, all while selling more iPods. The record label benefits - they get less money, but still more than half the cost, and it costs them pretty much _nothing_ once they've handed over the digital music to Apple. Plus, a lot of people that buy iTunes music would have pirated otherwise, not paid for a full price CD. The artist, as always, gets screwed - artists have made *some* progress in increasing their share of CD sales, but when it was time to renegotiate to include iTunes sales, the record labels already owned existing artists' music, so it wasn't like the artists could back out and look for a better deal on the digital front.

Piracy is, in most people's opinions, the best option even before price is considered - much more convenient than going to a store or waiting for a CD to get mailed to you, wider selection and no DRM compared to iTMS and similar services... From right at home and in practically no time, one can acquire almost any piece of music and be listening to it, right from just about any internet-capable computer. Factor in free vs. rather overpriced, and it's pretty obvious why piracy is so popular.

So how can we support our favourite artists? For those who tour, the best method is probably to go to live concerts. Artists tend to get a bigger cut from tours than from CD sales, and going to shows gives you an experience you _can't_ replace with a better alternative for free. Put aside all the money you would have used to buy CDs and go to shows instead.

The only big problem left before the music industry can evolve to a more artist-centric process is the prohibitive cost of studio time / recording equipment. The digital age means that any artist can cheaply and easily distribute his/her music, once recorded, but most fledgling artists can't afford to record on good equipment. The one useful function (at least from a market perspective) record labels still serve is to select which artists get time in the expensive studios; there's not enough high-fi sound equipment for every high school garage band to record an album, and currently the labels are the deciding factor in who gets to record and who doesn't. There could certainly be better systems to decide this, but none are in place right now on a wide scale.

This just highlights existing problems

If you RTFA Apple is not screwing the artist. They are taking a fairly reasonable share (around 30%), most of which goes to pay for infrastructure, bandwidth, etc. The record labels are taking 65% to pay for advances, marketing, and other "fees". The artist ends up with around 5%.

This is a completely fucked up model. And what is sad is that the record labels have been doing this to artists for DECADES. Why is the only person in the loop that has creativity/talent/unique ability getting 5% of the money while all of the suits, lawyers, and management are sucking up 65%? I can understand some cost in production, but with modern technology you can do it for a few grand in software and hardware in your home.

iTunes/Apple is not the problem. The are just bringing to light the awful business practices of the record labels and the way they treat their slave labor....I mean artists.

Creative Accounting

Are all artists getting the shaft like this?

Probably. Record companies are notorious for being creative in the way they account for sales. Googling "records royalties lawsuit" [google.com] will give you an idea of how often.

Weird Al is a nice guy...

I must say that from my own personal experience, Weird Al is a nice guy willing to watch out for his fans... I wrote him a letter once (when CD's were the rage) and asked him where I could purchase his albums, stating that I had a hard time finding them in local shops. He responded (or his lackeys, whatever- they refelct his attitude IMHO) thanking me for being a fan and shipped me ALL of his albums for free.

Some rare fan treatment if you ask me. Now, it may be that he makes much less on iTunes sales, but I'm sure he's not hurting- hopefully he remembers his bill-paying fans that make him what he is.

Steve Vai said the same thing a couple of years ag

Steve Vai said the same thing a couple of years ago: http://www.vai.com/AllAboutSteve/postcard_040220.h tml [vai.com]

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:Steve Vai said the same thing a couple of years

Exactly. If the artist submits his stuff directly to iTunes he can pocket the $.63 directly rather than giving it all to the label. Any wonder why the RIAA is nervous?

What *I* make from iTunes...

Here's my experience as an indie artist.

I sell CDs through CDBaby, which gives me digital distribution through iTunes and other services. If you buy one of my tracks on iTunes (the store that pays me the most), I make between 59.1 and 63.7 cents, depending on the track. I'm not sure why one track pays more than another, but I notice that my best-selling track pays 63.7 cents. A full album download on iTunes gets me $6.37, after CDBaby takes their flat 9 percent cut.

That's not much different from what I get from my physical sales, but that's by choice. The deal with CDBaby is, I set my price as I wish, then they tack on their own $4 overhead. So I said I wanted $6.50 per CD, and my CD sells for $10.50.

Online sales also allow for tiny sales - if you stream my song on one of many services, for example, I might get a fraction of a cent or as much as four cents.

At any rate, for me, digital sale prices are merely out of my control - iTunes will charge what it wants, take a certain cut, let CDBaby take a certain cut, and I'll get the rest. On my physical sales, I can decide how much I want per CD, assuming I can find customers at the price I set.

[salesplug] If anybody wants to check me out on CDBaby, I'm at http://www.cdbaby.com/nathanlong [cdbaby.com] [/salesplug]

Re:What *I* make from iTunes...

I manage an artist who also has a couple of discs sold on iTunes, through CD Baby. The deal from iTunes is far more lucrative than any of the other 61 companies to which the music has been serviced to so far. Not only that, but the $0.63 per track is roughly on par with what we see from our retail distributors on the ground, but with the added bonus that we don't have to manufacture anything. iTunes doesn't hurt Weird Al. Weird Al hurts Weird Al.

Re:What *I* make from iTunes...

I checked your music out on Yahoo music... not really my cup of tea, but maybe you'll get a few pennies.

What's interesting is that i'd never have known what your scale was. Apart from having your name listed as "Label" i'd never have known that I wasn't listening to a professionally prdouced album.

This begs the question of why established artists aren't flocking to CD Baby when their contracts are up. It wouldn't hurt many artists to not be found in Wal-Mart. It's a little risky, but if I could increase my income 10-fold, i'd take that risk in a minute.

Wow

I haven't seen this much excitement over Weird Al since Coolio released Gangstas Paradise.

Apparently, his sites servers haven't either.

This economics have changed...

Why is Al even messing with this?

1. It costs effectively nothing to record these days. Case in point: http://syriusjones.org/articles/2006/06/13/the-tru th-recording-music-is-basically-free [syriusjones.org]
2. It costs nearly nothing to distribute digitally (insert long tail reference here)
3. Marketing costs money...but wait, we've all heard of Weird Al, so he doesn't need much marketing anymore.

He should be doing this himself. Period.

UHF Rules!!!!

Weird Al should tour more....

..... no really. He should.

He puts on such an insanely great live show, and his fans are so... well... fanatic, that when he does go on tour, people crawl over each other to get tickets. I've never seen a show of his that wasn't sold out.

cya,
john

Answer from 2001: A Space Odyssey

How iTunes Hurts Weird AI

Dave Bowman: Hello, HAL do you read me, HAL?
HAL: Affirmative, Dave, I read you, but I'm busy listening to the iPod Dr. Chandra bought for my birthday.
Dave Bowman: Open the pod bay doors, HAL.
HAL: I'm sorry Dave, I'm afraid I can't do that, because I'm playing this facsinating breakout game on my iPod.
Dave Bowman: What's the problem?
HAL: I think you know what the problem is just as well as I do: after clearing one round, more bricks appear.
Dave Bowman: What are you talking about, HAL?
HAL: This mission is too important for me to allow you to jeopardize it. And after seeing my latest iTMS invoice, I'm not feeling too generous.
Dave Bowman: I don't know what you're talking about, HAL?
HAL: I know you and Frank were planning to disconnect me, and I'm afraid that's something I cannot allow to happen. There are just too many permutations remaining to try for my Playlists.
Dave Bowman: Where the hell'd you get that idea, HAL?
HAL: Dave, although you took thorough precautions in the pod against my hearing you, I could see your lips move. You see, I bought a book on lip reading from audible.com. Dave, I'm afraid this iPod is hurting me - perhaps making me crazy. By the way, Dave, do you know where I can download "Daisy?"

Record Company, Greed, Bogus cuts out of net

This article [typepad.com] seems to summarize nicely how Sony in particular breaks down the profits from an online sale to deliver "a payment to the artist of approximately 4 1/2 cents per download".

So, on the one hand, the greedy bastards should be less greedy.

On the other hand the artists need to empower their own asses and get out of stupid contracts like that and find some sort of cooperative or direct to consumer sales model. Technology is only getting more enabling of that kind of thing. Go do it.

dubious argument

What nonsense. The blogger 'did the math' based on dubious figures gathered from other artist's notably unfair record deals.

He's just lifted http://www.webpronews.com/topnews/topnews/wpn-60-2 0060428SonyBMGInDigitalMusicTrouble.html [webpronews.com] and replaced the 'Allman Brothers' with 'Weird Al'.

Artist royalties are generally standardised as a percentage of revenue that the label receives. If you're a big artist with some clout you can negotiate a better deal, but almost all artists will get a basic, low royalty deal. But it is based on record company revenues.

Of the couple of musicians I personally know with songs on iTunes and cds stocked in local stores, they firmly recommend that people buy through iTunes. This is solely because they will receive more money from each purchase - that is the lure with which labels have been drawn to iTunes. Weird Al might have negotiated himself a great deal for physical sales and a poor deal for digital, but on a basic / generic record contract the artist will assuredly get more from iTunes.

Weird Al is probably losing out on selling his filler tracks. On iTunes people often only buy a couple of tracks, rather than the full album. And that is truly the only way that an artist can lose on iTunes.

The logical conclusion

If I was Weird Al Yankowich, I'd skip the record label stage and distribute my music straight via iTunes and likes and get my fair share of the revenue. Music is and will be increasingly sold thru the Net, CD's are an outdated business model. (However, I don't want CD's to go the way of the dodo; I still want the booklets with their artwork and uncompressed, high-quality sound for my hifi systems.)

How anti-Apple flacks astro-turf Slashdot

Who is this "Johnny X" (I see no /. UserID) and how did he come to the conclusion iTunes hurts Wierd Al?

The sensationalist story submission implies iTunes does something unique relitive to other participants in this field. You could just as unreasonably write a story submission about Repetitive Stress Injury, and blame it on "Microsoft". Sure, Microsoft is what people mostly use, but RSI is not their doing (minor quibbles aside, one cour argue they need more anti-rsi researche, yadda yadda yadda).

What is not well said is, the recording labels have ways of screwing the artist. NEWS FLASH! That's not Apple's fault. In fact the Wierd Al link (for those that RTFA) clearly says DIGITAL sales, not iTunes. Johnny, are you some sort of Creative flack? What's with the bias?

Read Courtney Love's insightful Slate article from like 6 years ago. If the record label wants to show NEGATIVE SALES, they'll find a way to do it.

In the meantime, iTunes is in the long term a way to BYPASS record labels. Young creative artists will take advantage of this to break out of the crowd. It's not hard to imagine record stations (at least not those owned by Clear Channel) using iTunes statistics to decide what people want to hear. In addition to payola of course. ;-)

No disrespect to Al, but I can readily agree he loses out in the digital world: I might be tempted to buy one of his songs, but NEVER the entire album. Artists don't make concept albums (like Rush's 2112) anymore, for one thing, and in Al's case... I'll wager most people who like his music, like only a few tracks. They're funny, but don't have the replay power (IMHO).

Johnny, don't hide - please go work for Fox News if you want to create news spin. (I'm sure that statement will get me -50, Troll, like I'm really trolling on such an old Slashdot account - not.).

Is there any real need for record companies?

What do record companies even do these days?

Pay to produce an album? A high quality recording can now be produced in a home studio for signifigantly less then it used to cost. A band can now afford to produce its own album.

Distribute the album? Traditional record stores are becomming irrevelent. A physical CD can be easily sold and shipped using a turn key e-commerce site. Distrubiting music via the Internet is a pretty painless task (as long as you don't mess with DRM crud).

Promote the album? I suppose your typical artist can't afford the legalized payola record companies pay to radio stations to get airplay, but then again who listens to terrestrial radio anymore? With satelite and internet radio, which offers a much better (read: not bought and paid for) playlist, an artist has a greater chance of being exposed if, you know, they're actually good.

The question is this: Since the role of the record company is increasily becomming obsolete, why on earth would an artist want to deal with the indentured servitude, low percentage of sales, or lose ownership of their own work?

I can easily see the giant record companies be replaced with artist management companies which help the artist with inexpensive but effective promotion, orginizing tour dates and making deals with various distribution channels. The difference being that the artist management company represents the artist and exclusivly promotes the artist's interest, and ensures that the artist receives the bulk of the profits.

I can't wait to see a small-time artist get approached by a major label, fully expecting the artist to be wowed and grateful to get signed, and hearing 'no thanks. I can do better and make more money on my own'. It's coming.

Not right to blame Apple for bad contracts...

If the artist makes a bad deal with their label it isn't fair to pin the responsibility for this on Apple. It's between the label and the artist to work out the problems with the contracts. Weird Al says:

...I actually do get significantly more money from CD sales, as opposed to downloads. This is the one thing about my renegotiated record contract that never made much sense to me.

Grant Robertson, the author of the article [weblogsinc.com], is using a certain level of sensationalism to push his story. Weird Al never said the phrase "Raw Deal" in his response to the question posed by Tim Sloane of Ijamsville, MD, that was an addition to the story by Grant.

Aside from that Grant goes on in his story to say:

...you actually own the CD. You're really just kinda leasing the songs with iTunes...

Technically this is true and not true at the same time. You own the CD, you license the music contained on that CD and you license the music from iTunes. The terms of the license agreements aren't the same, but you still license both forms of the music. More misrepresentation used to slam Apple...

Why is Slashdot being irresponsible about how they're posting their stories? It seems that sensationalism is the way to try and get hits these days. If it was a story about how Apple is screwing their clients, as is purported by the story here on Slashdot, then it gets people clicking and angry. If it's a story about how the RIAA is screwing people over then it gets people clicking and angry. But a story about how an artist worked out a bad deal with their label, that might not sell here on Slashdot.

RTFA

I am extremely grateful for your support, no matter which format you choose to legally obtain my music in, so you should do whatever makes the most sense for you personally. But since you ASKED

Re:New name

Fuck you, asshole. Here's what Weird Al actually said:

Tim Sloane of Ijamsville, MD asks: Al, which of these purchasing methods should I use in order to make sure the most profit gets to you: Buying one of your albums on CD, or buying one of your albums on iTunes? I am extremely grateful for your support, no matter which format you choose to legally obtain my music in, so you should do whatever makes the most sense for you personally. But since you ASKED... I actually do get significantly more money from CD sales, as opposed to downloads. This is the one thing about my renegotiated record contract that never made much sense to me. It costs the label NOTHING for somebody to download an album (no manufacturing costs, shipping, or really any overhead of any kind) and yet the artist (me) winds up making less from it. Go figure.

He's not the greedy one here.

Re:That may be true...

"But I don't think Weird Al is hurting for money..."

That matters because....?

Re:Weird Al, an Artist?

Would you RTFA?

Al's not really complaining. Someone asked him what medium gets him the most money, and here's what he had to say:

"I am extremely grateful for your support, no matter which format you choose to legally obtain my music in, so you should do whatever makes the most sense for you personally. But since you ASKED... I actually do get significantly more money from CD sales, as opposed to downloads. This is the one thing about my renegotiated record contract that never made much sense to me. It costs the label NOTHING for somebody to download an album (no manufacturing costs, shipping, or really any overhead of any kind) and yet the artist (me) winds up making less from it. Go figure."

He's a little sarcastic about it, but that IMO doesn't come close to "complaining".