94 Cents

Bad Thoughts

I found an article about the business of streaming services, but I found one paragraph particularly disturbing:

I downloaded an album on iTunes yesterday called In Blood Memory by Jen Cloher for $10 because I knew I’d be talking to her later (it’s very good, by the way). I asked her how much of that she got. Answer: “about $6”. But that’s only because she owns her own label. Normally for a $9.99 download, the artist gets 94 cents, the record label $5.35 and iTunes gets $3.70.

I think I've seen a lot of discussion about how little eMu pays artists signed to labels, but I'm surprised that iTunes, which reputedly pays the best prices, pays as poorly as it does.

cafreema

To be fair, that's not just an iTunes issue. That's also a label issue. While it's crazy that iTunes gets 37% of the retail price. There is also no way that a label does enough to legitimately claim 85% of the 'wholesale' price.

Craig

Doofy

I'd say 37% is not completely unreasonable for the benefit of having your product in the biggest music store on the planet. As for the rest of the pie, self-produced is the way to go.

kargatron

I didn't read the article, but it's not clear that how iTunes pays is how it maps out in the end. E.g. perhaps the artist's share there is composer royalties or something that goes direct from sale to artist, and the rest just goes to the label as a matter of financial transactions. The label and artist could have a separate agreement about dividing proceeds, no?

greg

I suspect also it will depend upon who the artist is, which label and so on. I can't imagine the Beatles and their heirs, in the case of John and George, had such a deal when iTunes got their back catalogue exclusively.

thomnottom

I'd say 37% is not completely unreasonable for the benefit of having your product in the biggest music store on the planet.

And that's exactly how monopolies work - get the biggest share and then you can charge whatever you want.

Apple (and to some extent Amazon) really pulled the wool over the artists eyes by pretending to revolutionize the industry. But the new boss is the same as the old boss - only now people don't even have to buy your whole album.

Nereffid

from a recent BBC article on the price of CDs (http://www.bbc.co.uk/news/magazine-23840744):

About 13% goes to the artists, while 30% goes to the label, with a 17% cut going to the government in the form of VAT (applied at 20% and therefore 1/6 of purchase price). About 17% goes to the retailer, while the rest goes to manufacturers (9%), distributors (8%) and the spend on administering copyright (6%).

If you add up retailer+manufacturer+distributor, all replaced by iTunes, that comes to 34% - similar to the iTunes cut of a download.

thomnottom

But the manufacturer part is no longer around and distribution is still handled by someone else (either the label or a network they pay to get the digital files to Apple). So Apple charges more than double what retailers used to charge even though that really is their only function.

As a comparison, Bandcamp charges 15% to start and drops that to 10% once you're making $5k/year. I would also argue that they give you more services for that cost - although obviously not the web traffic. CDBaby charges 9% for downloads or $49/album to distribute to iTunes.

Of course it was also posted somewhat recently by an artist (not sure if it was here) that a single CD sale back in the 90s is the equivalent to 14,000 plays on Spotify as far as revenue goes. I'm not trying to knock anyone here (I still buy from Amazon and 7digital and don't know if their numbers are any better) I just think this stuff really shows that the industry has evolved far more poorly than thought and is still dominated by "middlemen".