$$$ splits on mp3 downloads article

[BrianT]

THIS LINK purports to detail the fiancial splits in mp3/iTune downloads. They do not say where the info was obtained.

Assuming it's accurate (and it looks plausible to me, based upon what I do know), it brings some focus to how screwed the artist really is in the scheme of things. Nowhere is the producer mentioned, but his money will come out of the artist's royalty. There goes 3 or 4% of the pie, which is actually 20-35% of the artist's money.

So if we knock the artist down to a net of 10%, even before managers and attorneys take their chunk (another 15-25% of the artist's total), the artist is looking at less than 1/3 of what the record company takes after the artist fully reimburses them for all of the recording costs and a good bit of the marketing!

Yeah, I know many of us already know that, but when you're looking at it in a pie diagram and realizing there is zilcho manufacturing cost for a downloaded song, it really does look ugly. In this scenario, the utility of a record company seems greatly lessened.

New plan time.


Regards,
Brian T

[smoothmoniker]

Brian, I think this is the golden catalyst for the indies. They don't have to negotiate an international distribution network, they don't need to press a huge load of discs, they don't have to suffer the agony of buybacks (a much bigger problem for indies than for majors - nobody knows their artists)

Best of all, for $10,000 or so they can record one kick ass single, promote it, release it on itunes, and see if it hits. If it does, they release the dough for the record, and the band makes big. If not, they're out $10,000 instead of $150,000 (remember, for indies that's huge money).

I think it will work. The only pisser right now is that AFM (musicians union) is bitching about a reuse fee. Most of the records on the network don't have reuse lisences from the players, so they have to be paid everytime it switches formats (tv, video, movie, digital download).

-sm