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Summary:

This is interesting to learn that ~surprise!~ the record labels are giving artists the shaft with digital downloads. Considering that it costs them virtually nothing to distribute downloads, one would think they would pass the buck (no pun intended) to the artists. Yet, Weird Al comments […]

This is interesting to learn that ~surprise!~ the record labels are giving artists the shaft with digital downloads. Considering that it costs them virtually nothing to distribute downloads, one would think they would pass the buck (no pun intended) to the artists.

Yet, Weird Al comments on his site that he makes far less cash on downloads versus physical media, as in 85% less!

You might see article titles pointing the blame for this at Apple, which I don’t agree with. Apple is incurring a large cost to run the store and according to the report takes 35%. It seems fair in my view, but the problem is the rest is sent to the appropriate labels who then divide it up even more. I’ve not seen any data that suggests Apple is gouging the artists in their take of profiting from iTMS operations. In fact, the author agrees that 35% seems fair.

I feel for you Al and other artists in the same predicament. What can we do to balance the scales with the iTMS? Sure the simple answer is to buy physical media, but does that really fix anything in the downloaded music market?

  1. Hang in there, Al. Hang in there :)

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  2. That’s major labels for you.

    Of course they will say they had to advance huge sums for arists X’s coke habits and Y’s exhorbitant studio costs and so on. In many cases that is probably true. However it inevitably adds up to a whole lot less than what they earn from those kinds of artists.

    I have been dealing with iTunes contracts for a band I work with. The deal is -very- fair as far as I’m concerned. Things just go bad if you have middle men, i.e. not your own label.

    The solution is already written on the wall: goodbye labels, artists go direct. It costs comparatively little to fund your own music now with such cheap computers and software (relative to studio costs). You have no pressing overheads if you go pure downloads only – and then you get a healthy income from the downloads via iTunes.

    The real market now is for PR and marketing related services for artists. That’s all that labels are really for these days (if they’re not advancing you lots on stuff that never makes money). It should be that way – but the %s taken for what is effectively a marketing service are criminal.

    It’s exciting :)

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  3. i have to concur with everything Marc says :)

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  4. Mark’s summed it up.

    My mates (now retired) band released an album last year completely independantly. The only need for any ‘label’ of any sort was required for distribution of the physical CD’s. *That* is pretty much the only place where there is a need for them these days.

    Those who *do* sign to a label know the agreement when they sign on the dotted line. They can’t complain, since they elected to sign – they made that choice, they didn’t have a gun held to their head.

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  5. Randy Kiessig Monday, June 19, 2006

    Al is acting like folks buying something on Itunes would actually buy his CDs.

    I wonder how many more/less people buy his stuff now that its easier to get? So, in the end does he make more or less money because of this.

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  6. This may be an unrealistic suggestion, but it would be cool if apple offered to distribute, publish, etc. the artists directly and give them a huge cut in comparison. Easier said than done, and I know it’s probably unrealistic. But if they set up deals with smaller, or at least independent, record labels, and addressed the distribution only, maybe something could happen. This would be a distraction for Apple, honestly. However, we know the record companies will have to change at some point. Offering distribution to smaller labels could help trigger the change..

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  7. Apple can’t do this for most artists signed to a label. Any “decent” label contract will tie the artist down for all media formats available now and in the future. Don’t forget labels often pay a LOT of money up front and this is the trade off artists make. They get their studio fees paid, coke habit paid, rent paid, new car etc… then they wonder where all the money went from their tours and records :-)

    Apple can already distribute and publish via iTunes for any artist that has not signed a restrictive (standard) deal with a label.

    The future for artists is to run their own label. They still need the promotion aspect though – live performance, good management, keeping a high profile.

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  8. It’s more than what you make from P2P!

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