I got something in the mail last week I'd been wanting for years: a Too Much Joy royalty statement from Warner Brothers that finally included our digital earnings. Though our catalog has been out of print physically since the late-1990s, the three albums we released on Giant/WB have been available digitally for about five years. Yet the royalty statements I received every six months kept insisting we had zero income, and our unrecouped balance ($395,277.18!)* stubbornly remained the same.

Now, I don't ever expect that unrecouped balance to turn into a positive number, but since the band had been seeing thousands of dollars in digital royalties each year from IODA for the four indie albums we control ourselves, I figured five years' worth of digital income from our far more popular major label albums would at least make a small dent in the figure. Our IODA royalties during that time had totaled about $12,000 – not a princely sum, but enough to suggest that the total haul over the same period from our major label material should be at least that much, if not two to five times more. Even with the band receiving only a percentage of the major label take, getting our unrecouped balance below $375,000 seemed reasonable, and knocking it closer to -$350,000 wasn't out of the question.

So I was naively excited when I opened the envelope. And my answer was right there on the first page. In five years, our three albums earned us a grand total of… $62.47.

What the fuck?

I mean, we all know that major labels are supposed to be venal masters of hiding money from artists, but they're also supposed to be good at it, right? This figure wasn't insulting because it was so small, it was insulting because it was so stupid.

Why It Was So Stupid

Here's the thing: I work at Rhapsody. I know what we pay Warner Bros. for every stream and download, and I can look up exactly how many plays and downloads we've paid them for each TMJ tune that Warner controls. Moreover, Warner Bros. knows this, as my gig at Rhapsody is the only reason I was able to get them to add my digital royalties to my statement in the first place. For years I'd been pestering the label, but I hadn't gotten anywhere till I was on a panel with a reasonably big wig in Warner Music Group's business affairs team about a year ago

The panel took place at a legal conference, and focused on digital music and the crisis facing the record industry**. As you do at these things, the other panelists and I gathered for breakfast a couple hours before our session began, to discuss what topics we should address. Peter Jenner, who manages Billy Bragg and has been a needed gadfly for many years at events like these, wanted to discuss the little-understood fact that digital music services frequently pay labels advances in the tens of millions of dollars for access to their catalogs, and it's unclear how (or if) that money is ever shared with artists.

I agreed that was a big issue, but said I had more immediate and mundane concerns, such as the fact that Warner wouldn't even report my band's iTunes sales to me.

The business affairs guy (who I am calling "the business affairs guy" rather than naming because he did me a favor by finally getting the digital royalties added to my statement, and I am grateful for that and don't want this to sound like I'm attacking him personally, even though it's about to seem like I am) said that it was complicated connecting Warner's digital royalty payments to their existing accounting mechanisms, and that since my band was unrecouped they had "to take care of R.E.M. and the Red Hot Chili Peppers first."

That kind of pissed me off. On the one hand, yeah, my band's unrecouped and is unlikely ever to reach the point where Warner actually has to cut us a royalty check. On the other hand, though, they are contractually obligated to report what revenue they receive in our name, and, having helped build a database that tracks how much Rhapsody owes whom for what music gets played, I'm well aware of what is and isn't complicated about doing so. It's not something you have to build over and over again for each artist. It's something you build once. It takes a while, and it can be expensive, and sometimes you make honest mistakes, but it's not rocket science. Hell, it's not even algebra! It's just simple math.

I knew that each online service was reporting every download, and every play, for every track, to thousands of labels (more labels, I'm guessing, than Warner has artists to report to). And I also knew that IODA was able to tell me exactly how much money my band earned the previous month from Amazon ($11.05), Verizon (74 cents), Nokia (11 cents), MySpace (4 sad cents) and many more. I didn't understand why Warner wasn't reporting similar information back to my band – and if they weren't doing it for Too Much Joy, I assumed they weren't doing it for other artists.

To his credit, the business affairs guy told me he understood my point, and promised he'd pursue the matter internally on my behalf – which he did. It just took 13 months to get the results, which were (predictably, perhaps) ridiculous.

The sad thing is I don't even think Warner is deliberately trying to screw TMJ and the hundreds of other also-rans and almost-weres they've signed over the years. The reality is more boring, but also more depressing. Like I said, they don't actually owe us any money. But that's what's so weird about this, to me: they have the ability to tell the truth, and doing so won't cost them anything.

They just can't be bothered. They don't care, because they don't have to.

"$10,000 Is Nothing"

An interlude, here. Back in 1992, when TMJ was still a going concern and even the label thought maybe we'd join the hallowed company of recouped bands one day, Warner made a $10,000 accounting error on our statement (in their favor, naturally). When I caught this mistake, and brought it to the attention of someone with the power to correct it, he wasn't just befuddled by my anger – he laughed at it. "$10,000 is nothing!" he chuckled.

If you're like most people – especially people in unrecouped bands – "nothing" is not a word you ever use in conjunction with a figure like "$10,000," but he seemed oblivious to that. "It's a rounding error. It happens all the time. Why are you so worked up?"

These days I work for a reasonably large corporation myself, and, sadly, I understand exactly what the guy meant. When your revenues (and your expenses) are in the hundreds of millions of dollars, $10,000 mistakes are common, if undesirable.

I still think he was a jackass, though, and that sentence continues to haunt me. Because $10,000 might have been nothing to him, but it was clearly something to me. And his inability to take it seriously – to put himself in my place, just for the length of our phone call – suggested that people who care about $10,000 mistakes, and the principles of things, like, say, honoring contracts even when you don't have to, are the real idiots.

As you may have divined by this point, I am conflicted about whether I am actually being a petty jerk by pursuing this, or whether labels just thrive on making fools like me feel like petty jerks. People in the record industry are very good at making bands believe they deserve the hundreds of thousands (or sometimes millions) of dollars labels advance the musicians when they're first signed, and even better at convincing those same musicians it's the bands' fault when those advances aren't recouped (the last thing $10,000-Is-Nothing-Man yelled at me before he hung up was, "Too Much Joy never earned us shit!"*** as though that fact somehow negated their obligation to account honestly).

I don't want to live in $10,000-Is-Nothing-Man's world. But I do. We all do. We have no choice.

The Boring Reality

Back to my ridiculous Warner Bros. statement. As I flipped through its ten pages (seriously, it took ten pages to detail the $62.47 of income), I realized that Warner wasn't being evil, just careless and unconcerned – an impression I confirmed a few days later when I spoke to a guy in their Royalties and Licensing department I am going to call Danny.****

I asked Danny why there were no royalties at all listed from iTunes, and he said, "Huh. There are no domestic downloads on here at all. Only streams. And it has international downloads, but no international streams. I have no idea why." I asked Danny why the statement only seemed to list tracks from two of the three albums Warner had released – an entire album was missing. He said they could only report back what the digital services had provided to them, and the services must not have reported any activity for those other songs. When I suggested that seemed unlikely – that having every track from two albums listed by over a dozen different services, but zero tracks from a third album listed by any seemed more like an error on Warner's side, he said he'd look into it. As I asked more questions (Why do we get paid 50% of the income from all the tracks on one album, but only 35.7143% of the income from all the tracks on another? Why did 29 plays of a track on the late, lamented MusicMatch earn a total of 63 cents when 1,016 plays of the exact same track on MySpace earned only 23 cents?) he eventually got to the heart of the matter: "We don't normally do this for unrecouped bands," he said. "But, I was told you'd asked."

It's possible I'm projecting my own insecurities onto calm, patient Danny, but I'm pretty sure the subtext of that comment was the same thing I'd heard from $10,000-Is-Nothing-Man: all these figures were pointless, and I was kind of being a jerk by wasting their time asking about them. After all, they have the Red Hot Chili Peppers to deal with, and the label actually owes those guys money.

Danny may even be right. But there's another possibility – one I don't necessarily subscribe to, but one that could be avoided entirely by humoring pests like me. There's a theory that labels and publishers deliberately avoid creating the transparent accounting systems today's technology enables. Because accurately accounting to my silly little band would mean accurately accounting to the less silly bands that are recouped, and paying them more money as a result.

If that's true (and I emphasize the if, because it's equally possible that people everywhere, including major label accounting departments, are just dumb and lazy)*****, then there's more than my pride and principles on the line when I ask Danny in Royalties and Licensing to answer my many questions. I don't feel a burning need to make the Red Hot Chili Peppers any more money, but I wouldn't mind doing my small part to get us all out of the sad world $10,000-Is-Nothing-Man inhabits.

So I will keep asking, even though I sometimes feel like a petty jerk for doing so.

I do not share this information out of a Steve Albini-esque desire to rail against the major label system (he already wrote the definitive rant, which you can find here if you want even more figures, and enjoy having those figures bracketed with cursing and insults). I'm simply explaining why I'm not embarrassed that I "owe" Warner Bros. almost $400,000. They didn't make a lot of money off of Too Much Joy. But they didn't lose any, either. So whenever you hear some label flak claiming 98% of the bands they sign lose money for the company, substitute the phrase "just don't earn enough" for the word "lose."

** The whole conference took place at a semi-swank hotel on the island of St. Thomas, which is a funny place to gather to talk about how to save the music business, but that would be a whole different diatribe.

*** This same dynamic works in reverse – I interviewed the Butthole Surfers for Raygun magazine back in the 1990s, and Gibby Haynes described the odd feeling of visiting Capitol records' offices and hearing, "a bunch of people go, ‘Hey, man, be cool to these guys, they're a recouped band.' I heard that a bunch of times."

**** Again, I am avoiding using his real name because he returned my call promptly, and patiently answered my many questions, which is behavior I want to encourage, so I have no desire to lambaste him publicly.

***** Of course, these two possibilities are not mutually exclusive – it is also possible that labels are evil and avaricious AND dumb and lazy, at the same time.

Reprinted with permission from Too Much Joy.

So says a new survey out of the U.K., anyway. [The Independent via Boing Boing]

Music royalty groups ASCAP and BMI are harassing online music stores such as iTunes to pay performance fees not only for the songs that they sell, but for the short clips that they use as previews. You know, the things that entice people to pay for music. They want to be paid for advertisements for their product.

Just how backwards is this industry? How many years can they continue to just not get it in such an extreme way? You would have thought that maybe it would have taken a few years for them to figure out the internet, but we're way beyond that. This entire industry seems to be run by people who don't just not understand the internet, but are aggressive about not understanding the internet. They have their old way of doing business and the old way the world works, and they'll be damned if any new fangled thing like a complete upheaval in the way people acquire and listen to music is going to change that.

It'd almost be funny if the people who were really being harmed by these jackasses weren't the artists. Bands aren't the ones pushing for something that will only end with their best form of advertising being pulled from the iTunes Music Store (because make no mistake, that's what will happen before Apple pays for fucking song clips). It's these royalties idiots, the same people who almost killed off Pandora.

So here's the bottom line, guys: you're doing it wrong. And you've been doing it wrong for a while. You need to figure out a new way of doing business, and that doesn't mean just shifting fees around and charging where you clearly shouldn't be charging. Earn your paychecks, because unlike the bands you purport to be representing, you're still getting them. [CNET via Electronista]

Apparently, the record labels—that would be Universal, Warner, EMI and Sony—actually went to Apple with the CMX digital album format idea a year and a half ago, and Apple said shno. As Apple is wont to do after expressing a total disinterest in an idea, they promptly went to work on their own version, which rumor has it, is called Cocktail, which we'll see in September at the annual iPod event. The records labels' format won't hit until November.

This CMX deal sounds like a glorified version of the tragically awful Flash programs that shipped on some CDs back a few years ago, actually: It "opens and it would have a totally brand-new look, with a launch page and all the different options." Yeah, gross. U2 will be soft-launching it. Grosser.

Oh yeah, did I mention the records labels are going up against Apple, the biggest seller of music in the country on their home turf? It's not the first time Apple's tense relationship with the music industry has resulted in digital fisticuffs, but we all know the eventual result of the last war: Apple pretty much got what it wanted—completely DRM-free music—yielding the relatively minor concession of flexible pricing. The labels are doomed in this fight.

We're all probably better for it, anyway, since I have the feeling the record labels' album product will be markedly inferior compared to Apple's. Which won't be great either, since the whole digital album thing just seems silly, like trying to put a genie back in a bottle after the genie ate a whole pig with deep-fried ribs and a mountain of custard and washed it down with 14 gallons of beer. Some shit just doesn't work like that. Even Radiohead's given up on the album. [Times Online via Guardian via BBG]

"It was one of those things where we were in the position of everyone asking us what we were going to do," Yorke told the Hollywood Reporter." I don't think it would have the same significance now anyway, if we chose to give something away again. It was a moment in time."

Yorke and Co. have remained tight-lipped about whether they think the move was a success or not, but the freebie method has been adopted by other artists, notably Nine Inch Nails. The latest group to jump on the freebie bandwagon is Coldplay, aka Radiohead Lite, who announced on Monday that their new single, Violet Hill, would be available for free, and promptly b0rked the interweb* with their selfless gesture. [Reuters]

*The band's official website crashed.

The gist of all the suits against YouTube is that, because it doesn't pro-actively take down or automatically block copyrighted content, it effectively doesn't fall under the DMCA's safe harbor provisions. If Universal, Trent's former record label, hosts a site where a fan pulls a Danger Mouse with Year Zero and Prince's 1999, which Universal doesn't own, they think they'll be opening themselves to the same blasts they're pelting YouTube with. Then their lawsuit would be in jeopardy, and you can't have that.

Trent's thoughts:

While I am profoundly perturbed with this stance as content owners continue to stifle all innovation in the face of the digital revolution, it is consistent with what they have done in the past. So... we are challenged at the last second to find a way of bringing this idea to life without getting splashed by the urine as these media companies piss all over each other's feet. We have a cool and innovative site ready to launch but we're currently scratching our heads as to how to proceed.

"In response to purely speculative figures announced in the press regarding the number of downloads and the price paid for the album, the group's representatives would like to remind people that, as the album could only be downloaded from the band's website, it is impossible for outside organizations to have accurate figures on sales."

Good point. I would like to think that Radiohead fans aren't as cheap as we have been lead to believe. But my question is when are we going to see some official numbers? [e-consultancy via Pocket-Lint]

Nine Inch Nails Trent Reznor applauded Radiohead for their courage in going forward with the new business model, but he believes that that the low numbers could be partially due to problems with their execution. Problems he hopes to overcome by offering customers the option of paying nothing or $5 for Saul Williams' new album The Inevitable Rise and Liberation of NiggyTardust, which he produced. If customers want the free version, they will have to settle for a 192kbps MP3 bitrate which might lure audiophiles to pony up some cash for the 320kbps MP3 or FLAC lossless version. So will a new approach help or are music fans just hopelessly cheap? Only time will tell. [Crave]

While he kind of dodged the question in the famed interview he revealed he was a former OiNK member, this feels like a pointer toward where the release of the next NIN album is heading. I'd still prefer a physical CD, personally, but this kind of digital release I can get behind—the price and the format are right. The rest of the industry would do well to pay close attention to how this turns out—or not, and simply follow suit. [Niggy Tardust]

If you want a physical copy, you'll need to drop a whopping $82 on the "discbox," which includes both CD and vinyl versions of the album, plus an additional CD/vinyl of more new songs, with the CD also including digital pictures and other such goodies. It also comes with a big photo/art book. That version also comes with the digital download, as the physical copy won't drop 'til December 3rd (the delay to help prevent leaks, presumably).

What Radiohead is essentially doing is making piracy useless for their album. It won't leak, so you can't get it early by pirating. And, assuming they'll be selling high-quality MP3s as they do with all their other albums, there's no reason to avoid DRM by pirating. And, since it's essentially free if that's what you think it's worth, you won't save any money by pirating. By making this the best way to get the album, chances are good that people will actually, you know, pay for it, even though they don't have to. And since this is OMG Radiohead, you know boatloads of people are going to drop $82 on the collectors-item discbox, which is sure to help them make their ducats.

Oh, did I mention they're doing this without a record label? Yes, that sound you just heard was the music industry collectively crapping its pants. [Radiohead via Idolator]

Of course, the sleazy grandma-suing record companies will blame pirates for poor sales, which is much easier than actually signing competent artists who don't crank out shitty music year after year. Most of the steaming heap is not even worth stealing. – Charlie White

Digital sales boost music industry [Variety]