Apple Threatens to Shutter iTunes Over Royalty Rate Hike...

[Anubis]

Originally posted by: JackBurton


LOL, I'd like to see them pull themselves from Apple. iTunes is a MONSTER selling machine. NBC tried to pull that crap and guess what? They're right back with iTunes now. But even though I love iTunes, I think it would be hilarious if iTunes shuts down and P2P becomes even bigger than it is now.

How about $0 royalties? That sound good record labels?

lol thats exactly what will happen, shut down the legal way to get songs that millions uses, and millions will just steal it

 

[LikeLinus]

Originally posted by: Anubis

Originally posted by: JackBurton


LOL, I'd like to see them pull themselves from Apple. iTunes is a MONSTER selling machine. NBC tried to pull that crap and guess what? They're right back with iTunes now. But even though I love iTunes, I think it would be hilarious if iTunes shuts down and P2P becomes even bigger than it is now.

How about $0 royalties? That sound good record labels?

lol thats exactly what will happen, shut down the legal way to get songs that millions uses, and millions will just steal it

You really think that the 5 Billion songs they've sold, all of the people are just going to start stealing music? CD's are still selling. Artist are still going platinum. I think most of them make more money off touring than the actual CD sales. I'm sure some people would turn to stealing, but I think we know most people will end up back to buying CD's or using Amazon MP3 service...or just pay a little more some where else.

 

[theeedude]

They are bluffing. It would be like cutting off nose to spite the face.

 

[sandorski]

You can Add numbers together? OMG, contact Jobs and let him know.

 

[JS80]

Originally posted by: nakedfrog

Originally posted by: JS80

Originally posted by: Perknose

Originally posted by: JS80
lol idiots.

why not give option for a donation rate? min 99c, then give option to buy at 1.05, 1.15, proceeds go to apple after the artist gets their measely 15 cents.

Fixed.

You don't get something for nothing. A lot of times artists get a salary along with the royalty. Not only that, the studio fronted all the costs of producing, recording, paying for hookers and blow, etc.

15 cents is VERY generous.


This actually can be Apple's chance to become a "fair" record label for independent and future artists and bust the record label monopoly. Nowadays you can get all the recording gear for a few grand...Apple should set up a program where unsigned artists can sell directly through them and split it 50/50 if they record it themselves. If it catches on, already famous artists who are due for a renewal can sign directly with apple, threatening the entire record label existence and network.

What?
Fronting the costs only means the artists pay for it after the fact. Please let me know which artists receive a salary.

Try this. Remember Carly Smithson on American Idol? http://aaahq.org/southeast/2003/cases/subid_249.pdf

Summary: MCA spent ~$2.2 million to produce, promote Carly, album sold $5000 (400 copies).
Carly got $100k up front + $5k/mo living expense + car + drugs, etc.

Here's another famous one: Guns n Roses
http://en.wikipedia.org/wiki/Chinese_Democracy

started recording in 1994 and i don't even think it's done yet

During this time, Geffen paid Rose $1 million to try and finish the album, with a further $1 million if he handed it in to them by March 1, 1999.

According to a March 2005 New York Times article, production costs for the album have reached $13 million, making it probably the most expensive recording never to be released.

So yea, here's the world's smallest violin for record artists.

 

[akshatp]

Originally posted by: abaez

Originally posted by: akshatp
Apple could of course raise the song price from 0.99 to 1.05, no?

Seems BS that the record lable gets that much and the actual songwriter/musician gets so little. Limewire FTW!!!

I don't understand your logic. Even though the labels are ripping off the artists, at least they get something when you buy from iTunes. Limewire gets them absolutely nothing... how is that better or "ftw"?

You misunderstood..

Better for ppl who use Limewire... Yea it hurts the songwriters, but at least the record companies arent getting anything!!

Disclaimer: I do not promote the use of illegal P2P apps.

 

[thomsbrain]

Give me a fucking break. As a musician who has his band's work available for sale on iTunes, I can tell you that Apple already takes roughly 30 cents for every ~3 MB song they upload through the iTunes servers. That's $102 in profit per gigabyte before operating costs. So don't give me any shit about bandwidth costs. And operating costs? Practically zero. They get their content, images, artist info, etc, PRE-ENCODED and handed to them on silver platters by distributers. The core site is completely automated.

The iTunes store is a fucking money press for Apple. Slightly slowing the ludicrous speed at which the press prints money is not going to hurt them. They are fighting this to maximize profit, as you'd expect, but don't believe for a second that they wouldn't keep making massive profits if they have to pay a few extra cents per song.

 

[Ns1]

Originally posted by: thomsbrain
Give me a fucking break. As a musician who has his band's work available for sale on iTunes, I can tell you that Apple already takes roughly 30 cents for every ~3 MB song they upload through the iTunes servers. That's $102 in profit per gigabyte before operating costs. So don't give me any shit about bandwidth costs. And operating costs? Practically zero. They get their content, images, artist info, etc, PRE-ENCODED and handed to them on silver platters by distributers. The core site is completely automated.

The iTunes store is a fucking money press for Apple. Slightly slowing the ludicrous speed at which the press prints money is not going to hurt them. They are fighting this to maximize profit, as you'd expect, but don't believe for a second that they wouldn't keep making massive profits if they have to pay a few extra cents per song.

Are you saying you get 70%? Cuz if so that's a fucking shitload.

 

[thomsbrain]

Originally posted by: JS80

You don't get something for nothing. A lot of times artists get a salary along with the royalty. Not only that, the studio fronted all the costs of producing, recording, paying for hookers and blow, etc.

15 cents is VERY generous.

The studio FRONTS the money. That means the studio gets paid back every single cent of that fronted money before the artist sees a single cent. Record labels are basically like giant banks that give you business loans in return for perpetual ownership of every product you ever make.

NO artists make a salary. The VERY lucky ones get advances, which, again, is only a FRONT of future earnings. The artist will not see another cent in payment until the entire advance, production costs, music video costs, marketing costs, etc, are all paid back in full. On top of that, the most producers get a chunk of royalties before the artist does, meaning that entire time the artist is struggling to repay the debt, the producer is skimming money off the top.

And most artists are lucky to make 10 cents on an iTunes sale. If a 4-person band sells a MILLION copies of a song on iTunes, they would each make $25,000 before taxes. Except, OOPS, they won't see a single dime of that because it will take all of it and then some to pay back the above costs.

Google "The Problem with Music" by Steve Albini, the engineer who recorded Nirvana's "Nevermind."

 

[thomsbrain]

Originally posted by: frostedflakes
There may be other companies who offer a similar service, but I know CDBaby can act as an intermediary between independent artists and iTunes, Rhapsody, etc. They keep a 9% commission, so 91% goes to the artist. Artists are paid weekly, by the way (assuming they meet the minimum payment, which is $10 I believe). 🙂

Why artists are still willing to relinquish the rights to their music -- their blood, sweat, and tears -- is beyond me. Labels may have been necessary 30 years ago, but the internet and digital distribution allows musicians to connect with more fans than ever in an unprecedented way.

CDBaby pays that percentage of what they get from the digital stores, not the total sale price. So that's what's left after Apple takes its cut.

 

[nakedfrog]

Originally posted by: JS80
Try this. Remember Carly Smithson on American Idol? http://aaahq.org/southeast/2003/cases/subid_249.pdf

Summary: MCA spent ~$2.2 million to produce, promote Carly, album sold $5000 (400 copies).
Carly got $100k up front + $5k/mo living expense + car + drugs, etc.

Here's another famous one: Guns n Roses
http://en.wikipedia.org/wiki/Chinese_Democracy

started recording in 1994 and i don't even think it's done yet

During this time, Geffen paid Rose $1 million to try and finish the album, with a further $1 million if he handed it in to them by March 1, 1999.

According to a March 2005 New York Times article, production costs for the album have reached $13 million, making it probably the most expensive recording never to be released.

So yea, here's the world's smallest violin for record artists.

Oooo, two isolated cases, and which one received a salary? 😉
I think that's the industry's cost for making bad decisions/investments.

 

[halik]

Originally posted by: tfinch2

Originally posted by: Zim Hosein
What am I missing?

Operating expenses.

lollerskates

 

[halik]

Originally posted by: mugs

Originally posted by: JS80

Originally posted by: Perknose

Originally posted by: JS80
lol idiots.

why not give option for a donation rate? min 99c, then give option to buy at 1.05, 1.15, proceeds go to apple after the artist gets their measely 15 cents.

Fixed.

You don't get something for nothing. A lot of times artists get a salary along with the royalty. Not only that, the studio fronted all the costs of producing, recording, paying for hookers and blow, etc.

15 cents is VERY generous.


This actually can be Apple's chance to become a "fair" record label for independent and future artists and bust the record label monopoly. Nowadays you can get all the recording gear for a few grand...Apple should set up a program where unsigned artists can sell directly through them and split it 50/50 if they record it themselves. If it catches on, already famous artists who are due for a renewal can sign directly with apple, threatening the entire record label existence and network.

I wonder how Apple's major label business partners would feel about that.

Naga...naga..nagonna happen. The record label would drop iTunes likes it's hot.

 

[thomsbrain]

Originally posted by: Ns1

Are you saying you get 70%? Cuz if so that's a fucking shitload.

No, that's what the labels take. Their deals with the artists give them anywhere from 2-5% of "wholesale cost." Meaning a typical major label artist might make 3.5 cents per song if they had a really good record deal.

As an indie musician, I'm lucky not to have a label taking a cut. I make 91% of 70 cents; roughly 63 cents per song. But because I don't have a label, I haven't sold many songs. 😉 In fact, we've only sold the equivalent of a few albums through iTunes, all of which were likely from people who already knew about the band from local shows and things.

I should also point out that JS80's artist examples are both artists who inked their original record deals 25 years ago or more. These days it is rare for bands to get any kind of advance, let alone stipend. Those rap artists you see on TV are wearing jewelry owned by the label, cars and houses rented for the video, and rapping about millions they don't have. The notable exceptions are those that have been around long enough to pay back the studios and start seeing real paychecks, or who have been smart enough to do producing in additon to rapping.

Anyway, bands have historically made their money on merchandise. But these days, labels are requiring cuts of that to sign contracts now, too (My Chemical Romance is a good example of a band that had to sell merch rights to get signed).

 

[frostedflakes]

Originally posted by: thomsbrain

Originally posted by: frostedflakes
There may be other companies who offer a similar service, but I know CDBaby can act as an intermediary between independent artists and iTunes, Rhapsody, etc. They keep a 9% commission, so 91% goes to the artist. Artists are paid weekly, by the way (assuming they meet the minimum payment, which is $10 I believe). 🙂

Why artists are still willing to relinquish the rights to their music -- their blood, sweat, and tears -- is beyond me. Labels may have been necessary 30 years ago, but the internet and digital distribution allows musicians to connect with more fans than ever in an unprecedented way.

CDBaby pays that percentage of what they get from the digital stores, not the total sale price. So that's what's left after Apple takes its cut.

True, but 91% of wholesale is still pretty good.

 

[0roo0roo]

Originally posted by: middlehead
The people who actually make the music want an extra 6 cents, the assmongers who rob them blind will surely increase it further to compensate, driving up Apple's costs, creating a circle of fuckery.

yea greedy bastards. they already are trying to put internet radio out of business with absurd royalty charges that exceed regular those charged to regular radio stations

 

[slag]

i find it hard to believe itunes is this big.. i mean, numbers dont lie, but i dont know a single person who uses itunes or downloads mp3's from an online store. Rip and put on your own mp3 device if you have to.

I must be getting old....

 

[Anubis]

Originally posted by: LikeLinus

Originally posted by: Anubis

Originally posted by: JackBurton


LOL, I'd like to see them pull themselves from Apple. iTunes is a MONSTER selling machine. NBC tried to pull that crap and guess what? They're right back with iTunes now. But even though I love iTunes, I think it would be hilarious if iTunes shuts down and P2P becomes even bigger than it is now.

How about $0 royalties? That sound good record labels?

lol thats exactly what will happen, shut down the legal way to get songs that millions uses, and millions will just steal it

You really think that the 5 Billion songs they've sold, all of the people are just going to start stealing music? CD's are still selling. Artist are still going platinum. I think most of them make more money off touring than the actual CD sales. I'm sure some people would turn to stealing, but I think we know most people will end up back to buying CD's or using Amazon MP3 service...or just pay a little more some where else.

will all of them start stealing - NO
will a large enough portion start doing it that it will get noticed, YES

 

[Ns1]

Originally posted by: thomsbrain

Originally posted by: Ns1

Are you saying you get 70%? Cuz if so that's a fucking shitload.

No, that's what the labels take. Their deals with the artists give them anywhere from 2-5% of "wholesale cost." Meaning a typical major label artist might make 3.5 cents per song if they had a really good record deal.

As an indie musician, I'm lucky not to have a label taking a cut. I make 91% of 70 cents; roughly 63 cents per song. But because I don't have a label, I haven't sold many songs. 😉 In fact, we've only sold the equivalent of a few albums through iTunes, all of which were likely from people who already knew about the band from local shows and things.

I should also point out that JS80's artist examples are both artists who inked their original record deals 25 years ago or more. These days it is rare for bands to get any kind of advance, let alone stipend. Those rap artists you see on TV are wearing jewelry owned by the label, cars and houses rented for the video, and rapping about millions they don't have. The notable exceptions are those that have been around long enough to pay back the studios and start seeing real paychecks, or who have been smart enough to do producing in additon to rapping.

Anyway, bands have historically made their money on merchandise. But these days, labels are requiring cuts of that to sign contracts now, too (My Chemical Romance is a good example of a band that had to sell merch rights to get signed).

So basically what you're saying is you gotta pay to leverage a labels resources.

got it 😉


I don't work in music, but I work in movies and it's the same shit.

 

[Nik]

Good. iTunes and Apple both blow and I hope to watch them go down in flames. 🙂

 

[Taxation]

The biggest reason that Apple is unwilling to raise their prices is likely the mental block that it would create in some users. Rationally, going from 99 cents to $1.05 is a fairly insignificant increase, but breaching the dollar-per-song limit will probably reduce sales significantly. They albums would probably be pushed above ten dollars as well if it goes through.