December 8 2006

The RIAA Rides Again

Luis over at BlogD had an entry today about the latest move by the RIAA to steal more money from people help the poor musicians who count on them for protection from those nasty, evil pirates! Well, according to this article, the RIAA is petitioning the courts to review the current royalty structures, not of the money that goes to the artists, but the amount of money that goes to the record companies.


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As quoted by The Hollywood Reporter,”Mechanical royalties currently are out of whack with historical and international rates,” RIAA executive VP and General Counsel Steven Marks said. “We hope the judges will restore the proper balance by reducing the rate and moving to a more flexible percentage rate structure so that record companies can continue to create the sound recordings that drive revenues for music publishers.”

What this boils down to is MP3s and Ringtones were not under the old structure, so the record companies view this as their chance to redo the royalties. Here’s the kicker though, not redo to benefit the artists, but instead to lower the percentage paid to the artists and raise the percentage paid to the record companies.

This is my second article in less than a week about how greedy the music industry is, and it’s not the musicians! The “suits” are the ones getting greedier and greedier and making the industry as a whole look like a cesspool of greed. They sit and whine and whine about how CD sales are slumping, but yet you never see any real reports on the amount of digital download sales making up for that. It would seem to me to be a lot if they are so anxious to get the royalties re-written.

Instead we are told time and time again how piracy is hurting the musicians…perhaps it’s actually the fox guarding the hen house that’s hurting the musicians. I know…call me a radical if you must.

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  • The record industry is like a spoiled child that has always been given 98% of the pie and suddenly finds it is only getting 95% and it’s having a hissy fit. Artists have been gouged pretty much forever by record companies who they used to be at the mercy of. I recall reading that artists received 25 cents per side on lp sales in the late 70’s (when a record sold for $7). The record compnay got $6.50 out of every $7 and the artists had to split their take among management and other members of the group.

    Getting more recent profit information is complicated. I’ve read that artists receive “up to” 4 cents per online song sale and up to 40% of net on CDs. However, the way in which net sales are calculated can be hugely complicated, distorted and criminally undervalued (as we know with the way movie studios manipulate their accounting to make it look like a movie made nothing). I’m also pretty sure that the amount an artist gets varies depending on how popular/powerful they are at the time of the first contract signing. U2 were luckier than nearly any other band because they got more money from and control of their music than any other young band when they first signed on to Island.

    The excuse for this has always been that they promote less successful artists with the profits from highly successful artists but, these days, that seems quite dubious since there are relatively few artists promoted at any given time. A few of them are groomed and packaged and then they bribe video and radio outlets to saturate viewers with the artist’s content. Since half the battle with music is getting it repeated enough for people to like it, this works pretty well.