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RIAA Wants to Cut Artist Royalties to 9%, Apple Wants Them at 4%, Artists Just Want to Eat

The RIAA always claims that its looking out for the livelihood of artists when it sues the hell out of alleged pirates, but in reality it's really fighting to keep record industry executives rich by defending an outdated and unsustainable business model. While before the PR team at least made an attempt to make it seem like artists were priority #1, they seem to have given up: the RIAA is now trying to cut down artist's royalties on digital downloads.

Yes, the RIAA doesn't think the record companies are making enough and that musicians are clearly making too much. I mean, they get 13% now. Like they deserve 13% for writing and creating the music that people are paying for. Hogwash! Someone had to, you know, encode it. That's worth at least 40%. And hey, these shoes don't shine themselves! So they're pushing to get that rate cut down to a shameful 9%, giving artists even less of a slice of the pie than before.

Of course, Apple, Napster and other large online retailers make the RIAA look like a charity in comparison, with Apple pushing to cut the royalty rate down to an insulting 4%. Yes, Apple wants artists to get a 4% of wholesale royalty rate. Really looking out for those artists, aren't you Steve?

If there was ever a time for a band to try going completely independent, this is it. Why give over 90% of your income away to greedy sleazebags when you can sell your music online without the middleman? This industry needs to be burned to the ground and built back up again; it's broken and it seems less and less likely that it'll be able to be fixed. [Hollywood Reporter via Slashdot]

11:00 AM on Tue Feb 5 2008
By Adam Frucci
44,812 views
110 comments

Comments

  • Who gives the RIAA any authority to begin with. Whoever it is should kick these asshates in the teeth and put them out of jobs.

  • ridiculous..

  • How the fuck does that sound right in their minds? It's insane, unexplainable.

  • But I thought Apple was the greatest company ever!!1!

  • Would any artist be interested in a peer to peer networking site just for downloading and uploading created works for the public to enjoy? Why do these artist create if what they create gets rapped/reconfigured by the RIAA? I seriously won't touch anything that has RIAA on it(downloading illegaly doesn't mean touching does it?) unless it's a shirt telling the RIAA where to stick it...

  • On man... I keep wondering how a single company can fuck up its public image that much.

  • Sorry, I meant oh, not on.

  • This is the same mentality that Hollywood has about the writers. Why on Earth would you bite the hand that feeds you?! These artists and writers are the real reason that CEOs can afford a cheeseburger and yet they are treated like SHIT! I hope they all get dandruff and are shunned by the world.

  • Even at 4% do you realize how much money these artists are making? Have you seen cribs lately? They can survive at 4% just fine, I suppose they might not be able to have 4 300k cars, just 3 now. Oh darn. And maybe they won't be able to have 2 swimming pools, just 1. How about giving more money to the retails stores and handing that down to the employees that actually work at those stores.

  • Please RTFA before you comment. Its being completely reported as music SALES which it is not. Its music STREAMING (IE Internet RADIO)

    The contention is that in terrestrial radio no one gets paid but right now they are forcing streaming services to pay because its "new media." Apple and others are saying they will pay if they must but they wont be paying as much as a actual SALE which is what they are now.

  • OK, so I buy a CD for $10 or the album off of iTunes for $10, same price (most of the CDs I buy are $10 brand new). There is no inventory risks, packaging or manufacturing costs for digital albums - just server space and cost. This is less overhead for the album and should yield the artist more profit - the RIAA and distribution makes too much on digital copies.

    RIAA and Apple wants to cut that down further?

  • Did anyone actually read the source article before commenting? It isn't Apple doing this, but the DiMA, which represents several companies including Apple. [www.digmedia.org]

    That's not to say Apple doesn't deserve some shrapnel over this, but they're not the ones directly pulling the strings on this one.

  • Image of Adam Frucci Adam Frucci at 11:19 AM on 02/05/08 *

    @Coder4Life: You do realize that the people on Cribs represent about 0.0001% of musicians, right?

  • @Coder4Life: What percentage of musicians do you see on Cribs? And why are you commenting on the music business anyway, you're an MTV viewer!

  • Another battle of really rich people fighting with even richer people fighting with uber rich people. YAWN. Do any of the dogs in this fight really expect me to feel bad for them?

  • It's difficult to go independent and get heard without a label. There are thousands upon thousands of bands online all trying to get heard. It's like standing in a crowded room of screaming people..all you can do is try to scream louder than the rest. Plus, consumers are so jaded by all the crap that's out there that they typically don't give new artists a chance.

    In case you couldn't tell, I'm a cynical musician.. :/

  • The next two product features better be an LED lit torch and finger-print resistant, self cleaning pitch-fork, since we clearly have some mob justice to take care of.

  • Just to play devil's advocate for a moment:

    If you've actually sold enough copies of an album to get royalties (because you have to cover the advance you are paid - which you get if not even your mom buys a copy), then you are guaranteed a successful touring/live show income.

    The label gets zero money for your touring, which is fueled by their money for marketing your album. They get none of the money from the albums you sell at the shows either.

    Just sayin'...

  • @Coder4Life: Most people that have fat ridiculous pay checks are artists that actually have some sort of business sense and have some sort of supplemental income, be it a clothing line, direct sales at a concert venue, or some other personal enterprise (I think Jay-Z said it best "I'm not a businessman I'm a BUSINESS, man!").
    That said, even the artists that do have a 3 million dollar contract with Time-Warner or whatever still get pennies off every album they sell. They're paid for their image and for the hope that in the future, they are going to make whatever company they sign with a lot of money.

    So yes, there are some artists getting PAID. Many of them, however, are not and NO ARTIST is making money off album sales directly.

  • Image of Kaiser-Machead Kaiser-Machead at 11:29 AM on 02/05/08 *

    What we need is to put the artists in a big iron cage with the executives, and the ones who come out of the cage alive get the deals they want. If an RIAA executive can kill his way to the top, I'll still think he's scum, but he's badass scum.

  • Screw it! IF YOU ARE AN ARTIST THAT WANTS TO GET YOUR MUSIC HEARD AND DOESN'T WANT THE RIAA IN ANY PART OF IT SHOOT ME AN EMAIL. I will go out buy a server, set up a dynamic DNS and create a website for people who want good music without the RIAA in it. If it gets bigger then we (the artist) could perhaps create an independent label and it would be more like 97% goes to artist. Then I could spam google to make any music search pull up the site on the first page. How bout that?

  • The day musicians finally create a coop and hire correct programmers to built a coop-owned iTunes-like platform will be a happy day for musicians and listeners alike. It sounds so odd that the ones who work most to make the music get so little of what the listeners pay... so sad...

  • @Hiphopopotamus: But the fact is, it doesn't take an immense talent to make a label, you just need funding. Musical talent needs to be rewarded, not blind corporate mechanics.

    You don't need to tell the next generation "if you have talent, you will get screwed, but if you talent is screwing others, then your set for life!"

  • @Falconfire: Thanks for the tip-off. Frucci... re-read the article. It does seem to be mostly about Streaming content. My take is that this should be about keeping small Digital Broadcasters in the game. They need to true up internet radio with Testicle Radio. Otherwise, all Internet Streaming will be the same advertisements and asshole DJ's that come over the FM Airwaves, once the independents are driven out of the business. Long live SOMA FM!!!

  • @Z: It's the same in any industry, my friend. How much of that $40 billion(Exxon) do you think the guy on the oil platform risking life and limb got in his X-mas bonus?

  • Dear RIAA,

    Taking more money away from the songwriters (or the band) only makes me want to buy RIAA product even LESS.

    I don't think you thought your dastardly plan through very well.

    Hugs and kisses,
    -Ax

  • Its a poorly written and confusing article as it flips from one method of distribution to another. Did I read correctly that the association representing publishers and artists want to charge a higher royalty for a digital downloaded song than they do for a CD?

  • Having actually read the articles...

    First, this isn't about the singers. It's the royalty to the songwriters. If Jay-Z sings a song written by Barry Manilow (this is an example, folks, don't let your mind be boggled), it's about the money that Barry gets. It has NOTHING to do what Jay-Z gets.

    But also...the Hollywood reporter article quotes the Digital Media Associations filings, DiMA is a trade association of companies that are involved in digital media distribution, both sales like Apple, and streaming like Live365. Slashdot says "big digital music companies, such as Apple" in their summary. And Gizmodo says "Apple wants artists to get 4% of wholesale royalty rate". Um...say what?

  • @Coder4Life: You sir, are very uneducated.
    Start here, then come back and comment again: [observer.guardian.co.uk],,2241544,00.html


  • [observer.guardian.co.uk],,2241544,00.html

  • What's worse, pretty much all the expenses for actually recording the album come out of the artist's royalty, and if the cost is more than that tiny fraction, the artist actually ends up in debt. Steve Albini has a great essay on all of this here.

  • Bah, stupid link: [tinyurl.com]

  • @Coder4Life: That's not the issue. And, even if it was, the RIAA has not effing reason withhold 91% of the profits of the work of the artist.

  • @gibson424: I agree with ya, alot of the GOOD music are groups no one has even heard of. Living in the philly area there are TONS of unsigned bands that have new, original and kick ass sound. But unfortunately for most, if there not on MTV, the brain dead public wont care about them. A band i went to school with was not doing so hot until they went for that EMO look, unfortunately thats how it has to be done, look like everyone else of GTFO. And as for cribbs, Most of those "artists" on that show are bling lovin rapers who don't really come up with much on the creative side. There not artists to me.

  • I'm really curious where the 91% goes. Since it's digital distribution, there's really no distributor or rather warehousing. I used to design albums for artists and I know that all costs associated with packaging and design comes out of the artists budget. So online, they're paying for their artwork and all of the work going into recording. So I'm really stumped about that 91%. It's absolutely ridiculous.

  • What's that RIAA? Upset because all the good artists that people are willing to actually pay for are going to indie labels that have a much better pay equivalent for their artists and you have no part in it?

    I feel their pain and understand that the RIAA needs to make a living as well...

    ...off of the backs of the creative people who actually do all the work.

  • I hope this goes through. The time is right for artists to go independent or to non-RIAA labels. Only "musicians" without any real talent need big labels anymore.

  • @sp00nix: I hear that, I live in the Philly area as well and there's never a lack of great music in the city or in the surrounding areas. Yet it's always the emo bands that get heard because that's what is popular.

  • "If there was ever a time for a band to try going completely independent, this is it." -- I'd say it was five years ago. The music labels' time is fading. They know it and they're trying to drag the whole industry down with them.

  • The part about Apple and the 4% doesn't sound right. As of right now if a song sells for $.99 at the ITMS, Apple keeps $.29 and the other $.70 goes to anyone else that has a share in the song. (go to www.tunecore.com for more info on that.) What's the source on that 4% number?

  • The only groups that can make money selling music outside the RIAA are those groups that were made famous and wealthy by their RIAA contracts. These days, a large number of those groups are engineered from the start--created like a new brand of soda.

    For the other 98% of professional musicians, you have to rely on some sort of deal with some sort of gatekeeper. If not the RIAA, then someone else. And eventually, that someone else will get just as greedy. You only have to look at the state of college radio in the 80s and 90s to see how that works out.

    The new gatekeepers of the internet era will be groups that have already made it big and use their existing brand identity to give other groups time on their websites, or the more innovative online radio stations like Pandora. One-click purchasing from iTunes or Amazon will make buying the song you like easy. The gatekeeper will take their cut, just like the RIAA, and you'll get what's left. Maybe that'll be more than today, maybe not.

    There will always be a need for someone to *filter* the worthwhile music from the bad. Consumers will never listen to 2 hours of horrible music in the hopes they'll hear that one song they'll like. There will always be middlemen in the process for this reason.

  • @gibson424: Amen brother. I have a site where I am giving my own music away. I don't even care if I make a living at it I just enjoy creating music. I am not a web programmer and not versed in creating traffic so I don't get many hits on the site. But...the music is there and it is free.

  • Steve Jobs = Devil

  • Image of Serolf Divad Serolf Divad at 12:13 PM on 02/05/08 *

    The music industry is going to shoot itself in the foot with these sorts of plays. These days it takes almost zero resources to put together an album, what with recording studios built into most computers. And the internet gives anyone a vast outlet for distribution. It's only a matter of time before artists get together and form an online publishing cooperative that will secure them a much larger share of sales revenues.

  • So what's really happening is it's giving people more of a reason to pirate. Why should I want to give 91% of my dollar to some company that tries to sue me when I could save that amount and just download it for free.

    Knowing the artist makes that little doesn't really give me much of an incentive to purchase now.

  • Read the article!!! It's NOT about artist compensation! This is three faceless corporate giants slugging it out over who can screw one another more. Your idealistic dreams of retiring off the album you mixed in GarageBand remain intact!

  • Ok, since I support all my favorite bands, from now on I'm going to download all of their songs on Itunes instead of torrents because I REALLY want to make sure that they get their 4 cents per song. /sarcasm

    the only reason i would ever feel bad for stealing music is that the artists wouldn't be getting money, but that argument just got less valid...

  • Image of ANoel ANoel at 12:19 PM on 02/05/08 *

    What artist wants to JUST play with himself in the basement? (Shutup, Michaels!)
    Artists NEED exposure! (Pipe down, Pee Wee!)
    That is what the big producers offered - the eyes and ears of a paying public and so, manipulated a monolithic indentured system for the creators and a corrupt payolla crew of record stores and radio stations and a Floyd-like bloated piggy bank for themselves.
    They never saw digital drive up.
    They didn't feel the ground-swell potential of a self-creating/producing/distributing revolution.
    They didn't notice until the golden goose flew the coop and put them out to pasture. Ladies and Gentlemen, Elvis HAS left the auditorium.
    As Jeff Zucker at NBC said, "We don't want to replace the dollars we were making in the analog world with pennies on the digital side."
    They now, instead of trying to feed at a empty trough - go for the hands that increasingly do not feed them - me and you and a 10 year old girl with a disabled Mom.
    Today we hear, like the starving curs they are, turn tail to attack the creators... and shame on the digital download services like iTunes for joining that greedy pack!

    My rant is simplistic, I know.
    But, so is the solution...
    Buy from the artists directly. Buy tickets to shows you like and purchase CDs there. Support local bands at every chance. If you must have RIAA-controlled music buy from second-hand shops or "borrow" from friends.
    Avoid the DRM leashes at all cost.
    Peace.
    Out.














  • Image of tamoko tamoko at 12:26 PM on 02/05/08 *

    @Z: I wish this could be happening on a grander scale. I see alot of interesting independent (and sometimes less then independent) bands going out on their own - i.e. using social networking to their advantage, leveraging the power of cheap, web based distribution models... One could hope.

    @Le0nidas: I made this rational too. The artists are already being screwed, So screw the RIAA's pooch as much as we can. Most,and take this with again of salt, make more money on touring and performances then actual record sales. The recorded music, hopefully. drives fans to experience their artist of choice live. This model may only really work for big name bands, but I bet the little guys are still making more in free beer and door covers then from their record label.

    Buy independent. Support local music. Screw DRM.

  • The world has finally turned itself upside down. This is just absurd.

  • @appsbyaaron:

    I think the writers have a tougher sell. Musicians who write their own lyrics & music and play it don't need others. Wirters need all kinds of stuff like actors and directors and... it's not comparable in an apples to apples kind of way.

    Sure the writers get screwed, but their fight is on its own in terms of who gets what. They don't have as good of an argument to get the same percentage a musician who writes their own stuff does. No offense, seriously.

  • Apparently you don't have to actually read an article to publish an article about it. Come on, I know we all hate the RIAA and for every Apple fanboy there's two people who hate em but to represent the article like that is a cheap shot. What is this, politics? Come on, read more than the headlines.

  • Image of johnnyabnormal johnnyabnormal at 12:47 PM on 02/05/08 *

    Wow, there are a bunch of people in here who have huge misconceptions about who this effects. 1st off, the "rich" artists are an extremely small percentage of the artists effected. There are crap-loads of artists who make a living making music that you have never heard of. Every time you turn on the TV, do you know who composed the music on the show? The TV spots? What about ringtones? Just a few examples... I could go on and on, but what I copied and pasted below is more important. I got this in a email from a music producer yesterday. Sorry for the wall of text:

    >a post by the National Music Publishers' Association (NMPA)
     
    On Monday, January 28, the Copyright Royalty Board (CRB) begins the hearing that will determine mechanical rates for every songwriter and music publisher in America. It will be the most important rate hearing in the history of the music industry because in addition to setting rates for physical products, rates will be set for the first time ever for digital products such as digital downloads, subscription services and ringtones.
     
    The National Music Publishers' Association (NMPA) will be representing the interests of songwriters and music publishers and will be fighting vigorously to protect those interests to ensure that musical compositions are compensated fairly.
     
    On the other side of this fight stands the Recording Industry Association of America (RIAA) and the Digital Music Association (DiMA). Both the RIAA and DiMA have proposed significant reductions in mechanical royalty rates that would be disastrous for songwriters
    and music publishers. This is literally a fight for the survival of our industry.
     
    To give you an example of what is at stake, the current rate for physical phonorecords is 9.1 cents. The NMPA is proposing an increase to 12.5 cents per song. The RIAA, however, has proposed slashing the rate to approximately 6 cents a song - a cut of more than one-third the current rate!
     
    For permanent digital downloads, NMPA is proposing a rate of 15 cents per track because the costs involved are much less than for physical products. The RIAA has proposed the outrageous rate of approximately 5 - 5.5 cents per track,