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Concern over small royalties for iTunes artists

updated 08:35 am EDT, Mon October 3, 2005

iTunes royalties

Music managers will today wade into the row over with the claim that artists are being unfairly squeezed in the digital era. The Music Managers Forum is unhappy that artists typically receive less than 6 percent of royalties from stores like Apple's iTunes Music Store. Jazz Summers, the manager of the Snow Patrol, and chairman of the Music Managers Forum, said: "Sale prices and royalties have gradually been eroded to the point where an artist needs to sell in excess of 1.5 million units before they can show a profit, after paying for recording time and tour support." The forum is hosting a special conference in Manchester today in an attempt to raise awareness of falling royalty rates, called the Know More! campaign. Headed by Mr Summers, the meeting will include managers behind acts such as Oasis, Radiohead and Jamelia.

by MacNN Staff



  1. vickys_box

    Joined: Dec 1969


    A solution

    Write your own music in your own studio. Publish it on your own website. There. Job Done. Forget about the record companies. Then complain that you only sell 12 copies.

  1. Ben Lawson

    Joined: Dec 1969


    Not an iTunes Problem

    This has nothing to do with digital distribution. The royalty structure hasn't changed as far as I know. What does happen is that the labels squeeze the artist harder even though they make more money from a digital download, while crying poverty/costs. Same old same old...

    I have a lot of sympathy for artists. When digital downloads become the main source of revenue I hope the iTunes store will be a solution to this dilemma. Artists can sell direct, and keep the entire royalty instead of 1/10th of it.

  1. Makosuke

    Joined: Dec 1969


    Not Exactly New

    This isn't a new issue, the iTMS and stores like it have just given the big labels less to hide behind when stiffing the artists.

    According to CDBaby, who'll submit any musician's material to the iTMS, even after they take their 9% cut the artist will be making 63 cents off every individual track and $5.91 off of every album you sell (I assume the latter is lower due to the larger number of songs meaning more infrastructure to support sales). That is 64% and 59% pure profit direct to the artist, respectively--certainly beats the 6% they're getting from labels. The two dozen other online stores they list all have very similar royalties.

    That very clearly shows that any artist, were they willing to forego the advertising power and startup capital a record deal *might* get you, could be making ten times the profit, and well over half of gross, in online distribution.

    So the question, then, is whether the better move is to try to wrangle more profit out of the big lables (who are almost certainly scamming their artists), or just encourage everybody to go indie--after all, there's room for EVERYBODY on the shelves of a digital store.

    Interesting that Apple (along with others, of course), have managed to come up with a system that actually provides a fair cut of profits to the artists; how common is that in the entertainment industry?

  1. burger

    Joined: Dec 1969



    I wouldn't worry, I'm sure the RIAA will reduce their fees once they see the artists are geting ripped off.

  1. d52boy

    Joined: Dec 1969



    Makosuke is right. Now musicians need to get together to form a non-profit cooperative dedicated to providing recording studio time, production expertise, and marketing. One giant website with links to download/purchase sites, and bingo! the suits have to go back to working for insurance companies. All it would take is 3-4 major artists to kick it off.

  1. bleee

    Joined: Dec 1969


    ITMS prints money...

    ITMS is a money printing machine for artists, theres no inventory to keep (no physical cd's to print) no brick and morter shop to pay for the only cost is bandwidth what more do you want. Millions of people visit ITMS each day because everyone who owns and iPod has to use iTunes. They literally sit back and wait for a cheque in the mail. Really artists should go back to printing cd lables off an ink jet and burning their on cd's from a home pc and trying to convice people to buy them from the street corner and REMEMBER what it's like to actually do some REAL WORK.

  1. kaisdaddy

    Joined: Dec 1969



    Yes, it is sad to see how obviously you are getting ripped off by your record label. The average record contract is very one-sided in favor of the label, who doesn't add a thing except for marketing.

    If you are really serious and believe in your music, you can do what Imogen Heap did in the UK ( She took out a new mortgage on her flat and started her own label. She has a distribution deal with RCA for the North American market, which she made on her own terms.

    Recording equipment has become so inexpensive compared to even 5 or 10 years ago that you really don't need a record company to spring for a $300 per hour studio. Get a Mac, a decent AD/DA converter and some software like MOTU or Logic Pro. Oh... Talent - that helps too. =)

  1. bernardb

    Joined: Dec 1969


    Back to Stealing

    So I suppose that instead of a legal download service with reasonable prices we are going to go back to wholesale stealing of music?

    Don't the artists and the record labels see that ITMS is SOOO much better than the old way?

    If the artists are getting squeezed, they need to re-negotiate their contracts with their producers. If the record companies pressure Apple into raising the price per song substantially, we will soon be back where we started with Limewire and Acquisition, etc.

  1. Oneota

    Joined: Dec 1969


    Apple could earn goodwill

    I think a good way for Apple to solidify its position as being pro-artist is to give up making profits from the iTMS (which are meager as is, anyway). Take enough of the 99 to pay for expenses, give the labels their cut, but give the rest to the artist.

    If I remember, Apple only makes about 7 per song anyway, and if the artists are only making 6, then Apple giving up its tiny profit in exchange for becoming the Artist's Hero would give them a huge leg-up in the future, I think.

  1. Warrenpeace

    Joined: Dec 1969


    Oh, that again.

    Record companies are evil, but c'mon is it really that bad?

    As I type this, while sitting in my stuffy, windowless office in a thankless IT job I'm wondering; 'Could being a musician for a living be that awful?'. Maybe they could work at Starbucks instead and complain about the money they make per coffee they sell ratio.

    It just seems they're never happy. It's the internet's fault, it's the record companies fault, it's Ticketmaster's fault.

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