Recording industry really is loosing money

[narzy]

Originally posted by: skace
If the internet did not exist, if file sharing did not exist. I and most other people simply wouldn't have heard much of the music we now know of. We also wouldn't have bought CDs for only 1 good song. This stuff isn't being bought because 99% of it sucks, not because mp3s are out there. That simple. To ignore this point is silly. People won't buy what they don't think justifies the price, 15 dollars for 1 good song is not a good price and wouldn't be paid.

quasi good points yes music is crap I am talking ONLY about music you like enough to keep on your hard drive and burn to CD not the sh!t out there.

 

[Derango]

They gained money from me. If I coulden't have listened to the full songs on a CD before I actualy owned it, I never would have purchased most of the CDs I've purchased in the last 2 years

 

[amnesiac]

Retail price of CD: $18.99

Average actual cost of CD: $15-17
- Store's profit: $7.50-$9.00
- Artist's royalties: $1-2
- Record co's profit: $4-6
- Cost of production: $0.50

The record company is only losing a percentage of each CD you pirate, not the full retail value.

 

[pyonir]

how greedy are record companies?

Although indies traditionally offer less up front, artists can get a larger percentage of money raised through record sales. Rough Trade splits royalties 50-50 with its acts, as opposed to major labels, which typically offer from 10 to 20 percent -- and then charge all sorts of marketing and promotional costs back to the artist.

link

3. Recording artists are paid royalties that represent a tiny fraction of the money their work earns.

link

from the same link above:
The royalty rates granted in every recording contract are very low to start with and then companies charge back every conceivable cost to an artist's royalty account. Artists pay for recording costs, video production costs, tour support, radio promotion, sales and marketing costs, packaging costs and any other cost the record company can subtract from their royalties. Record companies also reduce royalties by "forgetting" to report sales figure, miscalculating royalties and by preventing artists from auditing record company books.

Recording contracts are unfair and a single artist negotiating an individual deal doesn't have the leverage to change the system. Artists will finally get paid what they deserve when they band together and force the recording industry to negotiate with them AS A GROUP.

Thousands of successful artists who sold hundreds of millions of records and generated billions of dollars in profits for record companies find themselves broke and forgotten by the industry they made wealthy.

Here a just a few examples of what we're talking about:

Multiplatinum artists like TLC ("Ain't 2 Proud 2 Beg," "Waterfalls" and "No Scrubs") and Toni Braxton ("Unbreak My Heart" and "Breathe Again") have been forced to declare bankruptcy because their recording contracts didn't pay them enough to survive.

Corrupt recording agreements forced the heirs of Jimi Hendrix ("Purple Haze," "All Along the Watchtower" and "Stone Free") to work menial jobs while his catalog generated millions of dollars each year for Universal Music.

Florence Ballard from the Supremes ("Where Did Our Love Go," "Stop in the Name of Love" and "You Keep Me Hangin' On" are just 3 of the 10 #1 hits she sang on) was on welfare when she died.

Collective Soul earned almost no money from "Shine," one of the biggest alternative rock hits of the 90s when Atlantic paid almost all of their royalties to an outside production company.

Merle Haggard ("I Threw Away the Rose," "Sing Me Back Home" and "Today I Started Loving You Again") enjoyed a string of 37 top-ten country singles (including 23 #1 hits) in the 60s and 70s. Yet he never received a record royalty check until last year when he released an album on the indie punk-rock label Epitaph.

 

[Mday]

narzy, your math is flawed. and ppl who only download music dont buy CDs anyway. there is a lot of crap out there, which already reduces the number of sales.

Fans dont want the RIAA to make money. Fans want the musicians to make money. Musicians dont make money from CD sales.

 

[narzy]

Originally posted by: Mday
narzy, your math is flawed. and ppl who only download music dont buy CDs anyway. there is a lot of crap out there, which already reduces the number of sales.

Fans dont want the RIAA to make money. Fans want the musicians to make money. Musicians dont make money from CD sales.

exactly what part of my math is flawed, I explained exactly how and where I got the numbers. sorry I ain't gonna do a 300 page write up on every single possible way the record industry is loosing money. these are their numbers and their thinking. I agree I dont want the RIAA to get my money I want the song writers, preformers, recording technicians ect to get my money. that being said I have over 320 MP3's (yes I know you have more but I DON'T CARE!) .

 

[narzy]

Originally posted by: pyonir
how greedy are record companies?

Although indies traditionally offer less up front, artists can get a larger percentage of money raised through record sales. Rough Trade splits royalties 50-50 with its acts, as opposed to major labels, which typically offer from 10 to 20 percent -- and then charge all sorts of marketing and promotional costs back to the artist.

link

3. Recording artists are paid royalties that represent a tiny fraction of the money their work earns.

link

from the same link above:
The royalty rates granted in every recording contract are very low to start with and then companies charge back every conceivable cost to an artist's royalty account. Artists pay for recording costs, video production costs, tour support, radio promotion, sales and marketing costs, packaging costs and any other cost the record company can subtract from their royalties. Record companies also reduce royalties by "forgetting" to report sales figure, miscalculating royalties and by preventing artists from auditing record company books.

Recording contracts are unfair and a single artist negotiating an individual deal doesn't have the leverage to change the system. Artists will finally get paid what they deserve when they band together and force the recording industry to negotiate with them AS A GROUP.

Thousands of successful artists who sold hundreds of millions of records and generated billions of dollars in profits for record companies find themselves broke and forgotten by the industry they made wealthy.

Here a just a few examples of what we're talking about:

Multiplatinum artists like TLC ("Ain't 2 Proud 2 Beg," "Waterfalls" and "No Scrubs") and Toni Braxton ("Unbreak My Heart" and "Breathe Again") have been forced to declare bankruptcy because their recording contracts didn't pay them enough to survive.

Corrupt recording agreements forced the heirs of Jimi Hendrix ("Purple Haze," "All Along the Watchtower" and "Stone Free") to work menial jobs while his catalog generated millions of dollars each year for Universal Music.

Florence Ballard from the Supremes ("Where Did Our Love Go," "Stop in the Name of Love" and "You Keep Me Hangin' On" are just 3 of the 10 #1 hits she sang on) was on welfare when she died.

Collective Soul earned almost no money from "Shine," one of the biggest alternative rock hits of the 90s when Atlantic paid almost all of their royalties to an outside production company.

Merle Haggard ("I Threw Away the Rose," "Sing Me Back Home" and "Today I Started Loving You Again") enjoyed a string of 37 top-ten country singles (including 23 #1 hits) in the 60s and 70s. Yet he never received a record royalty check until last year when he released an album on the indie punk-rock label Epitaph.

I never said they wern't greedy, I said they were loosing money. there's a difference .

 

[toph99]

they aren't losing any money from me... i still buy cd's from my favourite artists, because i feel i should support them. I download the songs that i would never buy the cd to, one hit wonders and the like. if i couldn't download them i'd just listen to them on the radio

 

[pyonir]

btw: you spelled 'losing' wrong.

 

[narzy]

Originally posted by: pyonir
btw: you spelled 'losing' wrong.

last time I checked spelling wasn't a requirement .

 

[pyonir]

Originally posted by: narzy

Originally posted by: pyonir
btw: you spelled 'losing' wrong.

last time I checked spelling wasn't a requirement .

never said it was. just pointing it out in case you wanted to edit the title.

 

[Cerebus451]

narzy, your math is flawed in exactly the same way that the RIAA math is flawed. You are assuming that every single downloaded song is getting burned to a CD and resulting in a lost sale. The problem is, more than likely less than 1% of downloads are resulting in lost sales. Yes, those lost sales are lost profits, but it is nowhere near on the scale the RIAA (or you) allude to.

Look at the numbers another way. A large percentage of "downloads" (I'd say on the order of 70%) are actually not downloads at all. Downloads that never complete, or are not what the person actually intended to download, are all downloads the RIAA will gladly lump into the list of downloads that are cutting into their profits, but are not in fact downloads of music at all. Just think of the number of times you have tried to download the song only to get disconnected and have to retry. That retry is counted as another download as far as the RIAA is concerned.

Next, as many have mentioned in this thread, it is pretty rare for these downloaded songs to end up on burned CDs. This is something the RIAA does not bake into it's statistics either.

Next, look at those that are burning them to CDs. What is the RIAA's biggest target? College campuses. What is there plenty of on college campuses? Poor college students that can't afford to buy all the CDs they want. You cannot include as a loss a sale that was never going to take place.

So, narzy, your math is technically correct. If every download was successful, and if every downloaded song was burned to CD, and if every downloaded song was downloaded by a person that was just trying to avoid buying the CD even though they had the money, the record companies would be losing oodles of money, and this is just what the RIAA wants you to believe. The RIAA will never admit to this because it does not fit their case.

Lastly, one thing the RIAA will never bring up is the positive effect Napster has had on CD sales. People can now gain access to music from local bands that they might not otherwise be able to even hear on the radio. They might then go out of their way to purchase CDs from this artist that they might not have ever even heard of if it weren't for Napster. The RIAA will never admit to this because it does not fit their case.

 

[philmacrevis]

Back when CD's first came out, the blank media was expensive and music CD's cost about $13 - 17 at most retailers. Now blank cd's are very cheap, so why are music CD's still about the same price?

 

[SludgeFactory]

Originally posted by: vi_edit

artist sales are an EXTREMELY small portion of their compensation. the majority of the money the bring in comes from tours and merchandise

Yay. Another nutjob who thinks that bands make bookoo bucks while on tour. Unless you are Britney Spears, Rolling Stones, or Aerosmith, you break even at best on tour.

Tours are there to promote CD sales, not the other way around.

For mainstream acts (i.e. bands that have "made it") everything I've ever read indicates that touring is where you make your money. Albums sales don't make you much at all, unless you're the Beatles or the Stones or Pink Floyd etc. and have the leverage to negotiate a favorable royalty rate. Tours do promote album sales, but the majority of that money will ultimately go to the record company and retailers. If you're talking about bar bands or independent artists selling CD's out of the back of their car, of course they don't make anything performing. They don't make anything on CD sales either. It's a brutal way to make a living and they're just trying to build support until they can get their big break, at which point touring will become their primary money-maker.

As far as the original point goes, is the recording industry really losing profits, it's hard to prove one way or the other, kind of like baseball owners who claim they're in the red but refuse to open their books. If they *have* lost a chunk of their profits to file-sharing, maybe they should address the underlying problems with CD's: the majority of them suck and they all cost too much.

 

[royaldank]

People also need to realize they are stealing when they download the latest album from p2p software. Throw any argument out there and it's still stealing. Whether or not you'd buy the album in the first place doesn't change the fact you're stealing. So, the record industry is upset and rightfully so. They are having their products stolen from them. However, people get upset at the record industry for trying to legally go about stopping the stealing and decide to steal more. When Napster was shut down, the internet was flooded with people getting their last minute looting of the songs they wanted. However, the stealing here is really hard for most people to see since it's such a fine line. What is the difference between taping a song off the radio or downloading it? The difference is the money. By taping it off the radio, you have to listen to the radio. Advertisers get to play ads for you and pay for that right. The label provides the station with the music to keep you tuned in so they the station can sell more ads. The ad money keeps them in business to promote the records that the industry sends them. You hear the song and go buy the record. Goes round and round. However, now you can just download and avoid all that, and get a perfect copy of a copyrighted song. That is wrong, but it's basically our own fault. People have become so willing to spend their money that they created this situation. Just about everyone on here said they wouldn't buy a particular album just for one song so they download it. Why? Don't buy the album. It sits there for weeks in the store because no one wants to buy it. If the band can't put a CD full of music on there, don't buy the thing. You don't have to have the song you like. It's not a necessity. But, if everyone didn't buy it, then all the labels loose money, a lot of money. So, they either fold or figure out something new to do. They can make compilation discs like "NOW: Vol 1" or whatever those discs are called. They sell better than most releases anyway. The consumer has incredible power but nowdays its rare to see consumers fight. If everyone quit buying them, something would have to give. Then you would see change in the industry. Pirating CDs seems like the wrong way to fight this. Consumers fighting nowdays is generally "give it to me at my price or I'll steal it and convince myself it wasn't stealing because the price was so high."

I'm hoping that maybe we fight the industry without stealing from the artists. I've downloaded songs before and realize that people do it. But, I buy CDs from bands and artists I like and fully support them on tour. And contrary to what some on here believe, most, if not all, of the bands I listen to profit from tours and merchandise more than CDs. Without touring, they wouldn't be able to live.

 

[lllJRlll]

Let's not forget that even though you might not be paying for the songs the RIAA still makes a few cents off you.

They get a piece of every blank CD sold ,so if I download a song that I wouldn't buy on an album or even pay $4 a single and burn it on a blank disc, they are actually getting money from me that they wouldn't have gotten

 

[lllJRlll]

Originally posted by: royaldank However, now you can just download and avoid all that, and get a perfect copy of a copyrighted song. That is wrong, but it's basically our own fault. People have become so willing to spend their money that they created this situation. Just about everyone on here said they wouldn't buy a particular album just for one song so they download it. Why? Don't buy the album. It sits there for weeks in the store because no one wants to buy it. If the band can't put a CD full of music on there, don't buy the thing. You don't have to have the song you like. It's not a necessity. But, if everyone didn't buy it, then all the labels loose money, a lot of money. So, they either fold or figure out something new to do.

If I wasn't gonna buy the CD or single anyway ,the record company still losses the sale,the only differance is me either having the song or going with out it

 

[Dragnov]

Boohoo. Just another reason for them to think of new ways to sell CD's. If you look at the Asian Market (where Internet is MUCH higher in usage over there), CD's actually sell quite well. The artists do A LOT of performances, they package posters or postcards or even music videos with their albums, the CD's themselves contain several good songs, and they sell for much less on top of all that.

Of course its different in terms of legislation, record companies, or whatever business matters possibly. But the bottom line is that there is an incentive to buy a CD instead of just downloading the MP3s.

 

[Paulson]

Guess what I do, I buy cd's, rip em to my hard drive, and then never listen to em again...

how great!

As far as I'm concerned until the RIAA stops bitching and figuring out that they can make money by offering mp3's to the people who actually wanna buy them, they'll be a lot more respected and appreciated.

People get mp3's regardless of who shares it and whatnot, so why are they worried if the mp3 format is easily tradible, if they can make money off of people who actually wanna buy music, they'll be making more than they currently are...

BTW, I really hate buying cd's when they only have 2-3 good songs. You tell me why I shouldn't be able to legally buy only certain tracks? Ya, RIAA can suck on it if they can't figure it out...

 

[rubix]

they may or may not be losing money because it depends on how you look at it. they can be losing money because of their owns faults and that they are not willing to adjust to the times and changes brought about not only by the internet and technology, but by what their customers want!

that's like saying if they charged 100 dollars per cd and no one bought them we are making them lose money. but that not a reasonble price. neither is 15 for a cd, nor is even 12 in my opinion. if someone wants to pay that, good for them. i don't even like audio cds anymore. i would like the option to download individual tracks, encoded at the bitrate i speficy, using the encoder and file format i specify. do they make any attempt to do this? not really. they should have started moving towards this in 1996, and they are barely even starting now. and when they do, you know they will encode in 128 and use the xing codec or some crap like that. and they'll charge like 1 dollar per song too, when really they should charge 25 cents.

so they are losing money, because of themselves. people don't want to wait around for them to finally catch up. their loss.

 

[Mr.IncrediblyBored]

Originally posted by: Paulson
As far as I'm concerned until the RIAA stops bitching and figuring out that they can make money by offering mp3's to the people who actually wanna buy them, they'll be a lot more respected and appreciated.

Why would a person pay for a RIAA-branded p2p app, when there are dozens of others that are free? That, my friend, is where the problem lies. The RIAA can't win. They can't charge you to download MP3s. If they do, you'll just turn to the many other free apps.

 

[AUMM]

for myself, i was never really into music until i was able to download mp3's and listen to variety of songs easily. so because of mp3s i now go to various performances and if i like an entire cd ill buy it.

 

[Mr.IncrediblyBored]

Originally posted by: rubix
so they are losing money, because of themselves. people don't want to wait around for them to finally catch up. their loss.

Who are you kidding? You're trying justify the fact that YOU are stealing from the RIAA. Because they didn't embrace the internet's newfound interest in MP3s, it makes it ok to steal music? I've said it once, and I'll say it again:

What did you expect the RIAA to do? I use Kazaa myself. I know its wrong. I'm not going to jade myself into thinking what I'm doing is somehow "right" or "ok."

 

[Paulson]

I would buy the mp3's... I have to have legalness because of what I do... I'm sick of buying cd's too... Maybe a lot of people would be hoarding it still, but I'd like to purchase all my music legally...

 

[zsouthboy]

Originally posted by: AUMM
for myself, i was never really into music until i was able to download mp3's and listen to variety of songs easily. so because of mp3s i now go to various performances and if i like an entire cd ill buy it.

Exactly.

zs