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How iTunes Hurts Weird Al
Posted by
samzenpus
on Wed Jun 14, 2006 09:35 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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Re:Still getting the raw end of the deal? (Score:5, Funny)
Step right up ladies and gents. Getcher tin foil hats here. Can't be a conspiracy theorist without the tfh.
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Have you ever seen a record contract? (Score:5, Informative)
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.
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Re:Still getting the raw end of the deal? (Score:5, Informative)
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Re:Still getting the raw end of the deal? (Score:4, Insightful)
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.
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Raw end...hah! (Score:5, Interesting)
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.
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Re:Raw end...hah! (Score:5, Funny)
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.
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Re:Still getting the raw end of the deal? (Score:5, Informative)
2) Very clever paraodies.
3) Albums contain a slew of hilarious original songs as well.
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Re:Still getting the raw end of the deal? (Score:5, Interesting)
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...
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Re:Still getting the raw end of the deal? (Score:5, Insightful)
I commend you for fighting for precision, but in this case I think you're trying to piss into the wind.
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Re:Still getting the raw end of the deal? (Score:5, Insightful)
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.
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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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Re:And if you want to be really charitable (Score:4, Informative)
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
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Cuplrit? (Score:5, Insightful)
Re:Cuplrit? (Score:5, Insightful)
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Culprit (Score:4, Insightful)
"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.
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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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In Satan's defense... (Score:4, 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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Re:The Shaft (Score:5, Insightful)
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.
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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)
Hah (Score:4, Funny)
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?
Poor Al (Score:4, Insightful)
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 (Score:4, Insightful)
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 (Score:4, Insightful)
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.
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Weird Al is a nice guy... (Score:4, Interesting)
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 (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:Steve Vai said the same thing a couple of years (Score:4, Insightful)
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What *I* make from iTunes... (Score:5, Interesting)
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 $10.50.
Online sales also allow for tiny sales - if you stream my song on one of many services, for example, I might get a fraction of a cent or as much as four cents.
At any rate, for me, digital sale prices are merely out of my control - iTunes will charge what it wants, take a certain cut, let CDBaby take a certain cut, and I'll get the rest. On my physical sales, I can decide how much I want per CD, assuming I can find customers at the price I set.
[salesplug] If anybody wants to check me out on CDBaby, I'm at http://www.cdbaby.com/nathanlong [cdbaby.com] [/salesplug]
Re:What *I* make from iTunes... (Score:4, Interesting)
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Re:What *I* make from iTunes... (Score:4, Interesting)
What's interesting is that i'd never have known what your scale was. Apart from having your name listed as "Label" i'd never have known that I wasn't listening to a professionally prdouced album.
This begs the question of why established artists aren't flocking to CD Baby when their contracts are up. It wouldn't hurt many artists to not be found in Wal-Mart. It's a little risky, but if I could increase my income 10-fold, i'd take that risk in a minute.
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Re:eat it eat it (Score:5, Informative)
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Re:eat it eat it (Score:5, Interesting)
For example, with web/digital radio. RIAA bought off Congress so that they could collect royalties for all music played over webcasts. Guess what, my friend's band whom I'm the manager for...never got to negotiate.
RIAA is !@#$% 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:That may be true... (Score:4, Insightful)
That matters because....?
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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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Re:Well duh (Score:4, Insightful)
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.
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