“The federal Copyright Royalty Board left the rate for royalties paid to songwriters for CDs and digital downloads unchanged,” the Associated Press reports.
“The ruling keeps the rate at 9.1 cents per song,” AP reports.
“Apple Inc. had threatened to shutter its iTunes store if an increase in the rate jeopardized its profitability based on a price of 99 cents per song,” AP reports.
Full article here.
[Thanks to MacDailyNews Readers “Fred Mertz,” “JES42,” and “MikeK” for the heads up.]
Looks like they thought better of killing the golden goose. Chalk up another win for Steve Jobs and music consumers.
& chalk up another loss for creators of music – & intellectual property in general.
It’s really not fair that the artists get such a small portion of the revenue, but who cares? Indie artists get everything they deserve.
Perhaps we’re beginning to see some youth in the organ i zation
(under 40)
Which is to say they don’t have to give ANY money to a label.
I personally wasn’t against the rate going up, or even of Apple no longer selling music; songwriters should get a raise like everyone else, whatwith inflation and all. That raise should come from the record labels, because frankly, what do they do?
What are their expenses in the digital distribution model? The record labelse aren’t hosting these songs and paying for the bandwidth; they aren’t paying for packaging, shipping, handling or postage, or sales people’s salaries and benefits.
Thanks MDN, you’re my friend!
Hopefully now internet radio can take a deep sigh of relief.
@boyweho–
I too, am in favor of a measurable financial increase, for all who are deserving, in a reasonable amount of time.
However, this isn’t the time for it. Maybe you live in a plastic bubble, but the financial world is falling apart around us as we speak.
Most of us should be happy to keep our jobs.
Here is a link to an article at Fortune giving a lot more information and breaking down how the $ are split.
http://money.cnn.com/2008/10/02/technology/ituneswins.fortune/index.htm?source=yahoo_quote
Chalk up yet another reason for artists to NOT do deals with the greedy bastard major record labels.
Sign a deal with an indie label or distribute yourself, and this won’t be an issue. You’ll get your publishing royalties and there won’t be a label hanging over your shoulder, sucking the lifeblood out of every unit sale you make.
Honestly, fred johnsen, I don’t understand how you can not get this. It’s not Apple at fault here.
With all due respect to Apple, I suspect their statement about “closing the store rather than raising prices” had absolutely zero effect on the decision. It shouldn’t have. There are plenty of other stores would would fill the vacuum in a heartbeat.
boyweho: It has nothing to do with artists getting an inflation-indexed raise like everyone else. Their royalty payments in this case are based on a percentage, so the amount does go up when they sell more.
Price of a used Mac computer for sound track editing: $500
Price of a domain name to host your own music label: $100
Price of registering your own record label company: $50
….Watching millions of artists starve because they’re giving 9/10s of all profits to a middleman promising riches… – PRICELESS.
Hmm, do I smell an orchestrated response going on. Well, if it quacks like one and complains like one and squeals like one… Jeesh, at least spread your responses out so that its not so damn obvious.
For the lazy ones who didn’t bother going to that CnnMoney article; here’s the split between Apple, labels and the artist:
Apple: 29c (making about 10c in profits, after infrastructure expenses);
Labels: 61c
Artists’ publisher: 9c
Obviously, the label gets twice as much as anyone else, with the artist getting peanuts. The 9c that goes to Artist’s publisher is further split between the publisher and the artist.
Labels’ expenses here are only marketing. They quickly recover the cost of studio production from the artists’ share, so it is difficult to comprehend the level of greed that these labels have.
Now, if you are an independent artist and publish your iTunes stuff through distributors, such as CD Baby, or similar, you, the artist, receive some 65c for each 99c track you sell (I’ve been doing it for quite some time). You obviously aren’t going to sell as many tracks as a signed high-profile, label-backed act, but you’re at least getting 10x more per song than that high-profile act. And you aren’t making some idiot MiddleBronfman rich in the process.
The right thing to do here was for the royalty rate to be changed at the expense of the labels’ share. Not because the artists deserver the raise due to the inflation (as was said, their raise is proportionate to the pricing increases and sales volume), but because their share of the pie is just miserably small. Obviously, that didn’t fly, so they just left everything unchanged.
Considering that our economy is in rather poor shape right now, it would be unfair to raise this rate for performers, while everyone else is taking a pay cut or losing a job. Eventually, though, work should be done, and Apple might be the right entity to champion it, to increase the Artists’ share in the revenue, at the expense of the labels.
Since they’re nearing ultimate domination, expect Apple to charge a fee to labels for infrastructure costs in the coming years.
That’s what scares the hell out of them.
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I like that. Charge them about 62%.
I think Steve should raise every song to ten dollars each and then sit back and laugh at all the illegal activity that would follow. When they came crawling back, offer to put the songs back in the store for 19 cents each.
HA HA!
WE WIN!
jsut try it again and see what happens.. you will start to lose millions on day one of our bullshit!
Since they’re nearing ultimate domination, expect Apple to charge a fee to labels for infrastructure costs in the coming years.
I like that. Charge them about 62%.
This would place Apple’s ethics on par with Microsoft’s.
Is this the future we want?
& chalk up another loss for creators of music – & intellectual property in general. —fred johnsen
What an ignorant comment! The songwriters need to be pounding on the music publishers’ door, not Apple’s. Music sellers are not responsible for the lousy deal that artists have been getting from music publishers for decades. Trying to make up the difference by holding up the merchants who sell the music is just plain wrongheaded.
@careful what you wish for
M$ would have demanded 100%. Apple is very fair!
maybe if people start using the genius function for finding and buying new music, indie artists will be more succesful and will encourage new artists to avoid the labels.
Since the entire iTunes, iPod, iPhone success story has not contributed a single thing to slow the dramatic collapse of the value of APPL shares, why the hell do I care if Steve shuts the store down or not?
That’s the strangest thing I’ve heard all day. The success of AAPL shares over the last five years is in no small measure directly DUE to the “entire iTunes, iPod, iPhone success story” you refer to.
But to address you question, in my mind there is no reason to care if the iTunes Music store shutters.
Time for Apple to start a Record Label.
Problem Solved. =P
For those who don’t know…
…there are online “record labels” who will take your music and place it on any/all the online stores such as Apple’s iTunes Music Store and only collect a mere pittance of a percent.
The secret the RIAA has is PLAYING the music on radio stations and Sat. Radio. to get exposure.
Unless you have some cool advertising trick up your sleeve to get people to notice, your music will get drowned in the mass of others trying to do the same thing your doing.
Naturally the way the world economy is going lately, in a downward direction, people are tightening up and not buying iPods, iPhones or even music since the radio is free. Pay as you go cell phones are much cheaper per month.
Save your money, Great Depression 2 is coming, like a slow rolling rock, gathering strength.
Gosh, I sure hope the people in the music industry don’t starve to death as a result of this decision.
Alansky,
The substance of your comment is correct, however, you got music publishers confused with the labels. The publishers take minimal, nominal cut out of the artists’ share of the pie; the labels are the ones getting twice as much as everyone else combined, and it is at the labels’ doors that the songwriters should be pounding. Unfortunately, under today’s conditions, it would do them little good.
An interesting suggestion was made above for finding a way to cut labels out of the loop (gradually) — use iTunes Genius to find new music. Instead of relying on radio and mass advertising (where big labels shove their synthetic product down our throats). Genius doesn’t care who released the song; it will find it for us as long as someone is listening to it, which breaks down many barriers.
Genius is a potential game changer, I have no doubt.
MDN:
You mean ‘goose that laid the golden egg’.
The goose is not itself golden.
Who needs the Music Store nowadays, Apple has the App Store, selling 100,000,000 Apps in 60 days.
And a 70/30 split in the artists (developers) favour. Fuck music!
Fred said: “& chalk up another loss for creators of music – & intellectual property in general.”
To which I respond: it’s a free market. You can choose whatever distribution method you feel is right. Don’t sell your music on CD if you’re afraid of duplication, don’t play it on the radio if you’re afraid someone might record it off the air, and don’t sell it on iTunes if you think Apple gives you a bad deal. Play all your music live like a real touring artist and make sure that your fans check their tape recorders at the door. Show your movies only in authorized theatres instead of allowing fans to download your work.
No manufacturer or artist today has ultimate power to dictate to distributors the terms of the deal. Terms of distribution and payment are negotiated between the creator and the entities that do the dirty, unrewarding work of getting the product to the people. Due to oversupply of artists and lack of competition in distribution, it’s natural that power is in the hands of WalMart, Apple, Amazon, and the other distributors. That’s reality.
Now Apple, imho, offers artists a fair deal by ensuring that no artist gets dumped into the discount bin. All songs are worth the same, whether recorded by Andy McKee solo or by U2 in front of 100,000 fans. It’s still just a song. It’s disgusting to see how many artists have been brainwashed into believing they are worth more than others based on the power of their label’s corporate marketing or because they have more songs in their catalog. More sales doesn’t mean better art, it often means only that a bigger corporation is pushing the airhead Britney single of the month. Thankfully times have changed so that young artists can sell music even when labels send only Britney demos to radio stations.
So, Fred, even if you think your song is worth more than 99 cents, fans know that the market is flooded with artists. Economics 101 tells you that when supply is great, the price will fall. Sorry to burst your bubble.