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How iTunes Hurts Weird Al 495

Johnny X writes "Weird Al Yankovic recently said he makes far less money when you buy from iTunes than when you buy an actual CD. This guy did the math and showed that Weird Al could be losing up to 85% of his record sales income due to the 'weird' ways the record companies compute digital sales. Are all artists getting the shaft like this?"
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How iTunes Hurts Weird Al

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  • by bricklayer ( 539164 ) on Wednesday June 14, 2006 @10:56PM (#15537262)
    The folks at Downhill Battle have been saying this for a few years now: []
  • Re:eat it eat it (Score:5, Interesting)

    by PortHaven ( 242123 ) on Wednesday June 14, 2006 @10:57PM (#15537269) Homepage
    Actually, a lot of artists never got to sign for digital.

    For example, with web/digital radio. RIAA bought off Congress so that they could collect royalties for all music played over webcasts. Guess what, my friend's band whom I'm the manager for...never got to negotiate.

    RIAA is !@#$% up....
  • Re:New name (Score:3, Interesting)

    by sketerpot ( 454020 ) <> on Wednesday June 14, 2006 @11:29PM (#15537445)
    *sigh*, fuck me apparently. Here's the Weird Al quote with non-broken formatting, a fan's question in bold and Al's reply in italics:

    Tim Sloane of Ijamsville, MD asks: Al, which of these purchasing methods should I use in order to make sure the most profit gets to you: Buying one of your albums on CD, or buying one of your albums on iTunes?

    I am extremely grateful for your support, no matter which format you choose to legally obtain my music in, so you should do whatever makes the most sense for you personally. But since you ASKED... I actually do get significantly more money from CD sales, as opposed to downloads. This is the one thing about my renegotiated record contract that never made much sense to me. It costs the label NOTHING for somebody to download an album (no manufacturing costs, shipping, or really any overhead of any kind) and yet the artist (me) winds up making less from it. Go figure.

    Sorry for the double-post.

  • Creative Accounting (Score:3, Interesting)

    by crmartin ( 98227 ) on Wednesday June 14, 2006 @11:30PM (#15537449)
    Are all artists getting the shaft like this?

    Probably. Record companies are notorious for being creative in the way they account for sales. Googling "records royalties lawsuit" [] will give you an idea of how often.
  • by tfurrows ( 541222 ) <tfurrows&gmail,com> on Wednesday June 14, 2006 @11:34PM (#15537464)
    I must say that from my own personal experience, Weird Al is a nice guy willing to watch out for his fans... I wrote him a letter once (when CD's were the rage) and asked him where I could purchase his albums, stating that I had a hard time finding them in local shops. He responded (or his lackeys, whatever- they refelct his attitude IMHO) thanking me for being a fan and shipped me ALL of his albums for free.

    Some rare fan treatment if you ask me. Now, it may be that he makes much less on iTunes sales, but I'm sure he's not hurting- hopefully he remembers his bill-paying fans that make him what he is.
  • by melted ( 227442 ) on Wednesday June 14, 2006 @11:41PM (#15537492) Homepage
    Steve Vai said the same thing a couple of years ago: tml []

    Here's an excerpt about iTunes in particular:

    For instance, If you go to Itunes and download a song for $.99, Apple retains about $.34 and the label receives about $.65. Labels then calculate a royalty base price to apply to the artists deal points. Following are some of the deductions:

            a. A packaging fee (container cost) of up to, and sometimes more than, 25%. That's 25% of retail which is $.99 equaling about $.25 (by the way, there is no packaging on a digital download).

            b. A 15% deduction for free goods. That's an additional $.15 or so. (There is usually no free goods with digital downloads unless someone is ripping it from the net.
            That leaves a royalty base price of close to $.60 per track that the artists royalty is calculated against. If an artist receives 15 points in their deal (and remember, that's a very good deal) then he is entitled to aprox. $.09 a track. This is then cut in half because of the "new technology clause" that is incorporated into most deals. The artists royalty is then calced out at $.04-.05 a download and from that, 100% of it is withheld by the label to go towards recoupment of any advances to make the record, advances in general, tour support, radio promotion and other things in some cases. Most managers and producers are paid from record one and are paid regardless of the expenses, leaving the artists with even more of a recoupment burden before they start to see any income.

    IOW, freakin' artist needs to be extremely lucky to see ANY of the money, ever, despite the fact that it's his work being sold. OTOH he may be able repay his debt to the label - this is something they won't be able to do if their stuff is sold through
  • by Flamesplash ( 469287 ) on Wednesday June 14, 2006 @11:42PM (#15537499) Homepage Journal
    you hit an interesting area. I find myself buying more 'risky' music with itunes pricing, so you could say that I maybe have a music budget, and itunes allows me to purchase music from more artists giving more people money, and maybe in the future giving them even more. However, with the same budget I could buy cd's of artists that I really like giving them more money in the end, and the 'artists' more in the end.

    So from my usage pattern, I would still be supporting my favorite bands, but not discovering so many new ones, at least not legally.

    I still support the burn a copy and mail the artist $10 method.
  • Take a minute (Score:2, Interesting)

    by Sentri ( 910293 ) * on Wednesday June 14, 2006 @11:43PM (#15537503) Homepage
    Before we start abusing Weird Al about his supposed complaints about not getting enough money, read what he said and realise he wasnt money grubbing. Before we start abusing iTunes about stealing too much of Weird Al's Money, lets accept that they are providing a service that they set the price for As for the Recording people, abuse away, they seem to be the main problem here. But again, that is perhaps not the best way. More investigation is needed and should be allowed to happen instead of randomly firing off abuse at any of the involved parties. From reading this article and some of the other /.'ers comments I think the problem can be boiled down to this: The recording companies are treating all income for a certain album as a single income stream that can be used against all of the costs for all of that album's various activities including but not limited to CD art and CD creation, promotion and recording. This may or may be unfair depending on your point of view. I think legally it makes sense, but it might feel like you are getting ripped off
  • by Nerdposeur ( 910128 ) on Wednesday June 14, 2006 @11:53PM (#15537557) Journal
    Here's my experience as an indie artist.

    I sell CDs through CDBaby, which gives me digital distribution through iTunes and other services. If you buy one of my tracks on iTunes (the store that pays me the most), I make between 59.1 and 63.7 cents, depending on the track. I'm not sure why one track pays more than another, but I notice that my best-selling track pays 63.7 cents. A full album download on iTunes gets me $6.37, after CDBaby takes their flat 9 percent cut.

    That's not much different from what I get from my physical sales, but that's by choice. The deal with CDBaby is, I set my price as I wish, then they tack on their own $4 overhead. So I said I wanted $6.50 per CD, and my CD sells for $10.50.

    Online sales also allow for tiny sales - if you stream my song on one of many services, for example, I might get a fraction of a cent or as much as four cents.

    At any rate, for me, digital sale prices are merely out of my control - iTunes will charge what it wants, take a certain cut, let CDBaby take a certain cut, and I'll get the rest. On my physical sales, I can decide how much I want per CD, assuming I can find customers at the price I set.

    [salesplug] If anybody wants to check me out on CDBaby, I'm at [] [/salesplug]
  • by Anonymous Coward on Thursday June 15, 2006 @12:01AM (#15537606)
    Damn but Jobs must be getting tired of that nonsense. Applet Computer should just acquire Applet Records and be done with it.
  • by iabervon ( 1971 ) on Thursday June 15, 2006 @12:05AM (#15537626) Homepage Journal
    That sounds a lot like Magnatune []. Okay, so John Buskman isn't an artist himself, but his wife is, and, in any case, the artists get a good deal: they retain copyright and (non-exclusive) licensing rights, and they get half of the purchase price (after credit card processing fees; and the whole charge for getting a manufactured CD goes to the printing and shipping people). Of course, artists mostly have to show up with the recording ready. But advertizing, distribution, and so forth are covered in the half that Magnatune gets, rather than being charged against the artist's share.

    Furthermore, there seems to be a lot of communication among the Magnatune artists; a bunch of the folk/world groups consist largely of solo artists in various combinations. So it is, in a sense, a coop; but the hassle of being an online business, attracting attention, figuring out what makes a good deal, and so on still requires a few people interested in some essentially non-musical effort.
  • by codejill ( 982615 ) on Thursday June 15, 2006 @12:08AM (#15537636)
    I manage an artist who also has a couple of discs sold on iTunes, through CD Baby. The deal from iTunes is far more lucrative than any of the other 61 companies to which the music has been serviced to so far. Not only that, but the $0.63 per track is roughly on par with what we see from our retail distributors on the ground, but with the added bonus that we don't have to manufacture anything. iTunes doesn't hurt Weird Al. Weird Al hurts Weird Al.
  • Overpriced artists (Score:2, Interesting)

    by gilesthegoat ( 978161 ) on Thursday June 15, 2006 @12:17AM (#15537674)
    Agreeing with one of the comments above, CD's "are vastly overpriced." I think artists are making entirely too much money and being treated with an eminence that does not encourage great music but wealthy lifestyles. Case in point, I caught a Youtube video of Michelle Branch spending about $12,000 in one day as an "in the life of Michelle Branch" special. It made me sick. If you're a respectable artist, spread your music, make a living, but don't do it to relish in an exuberant and luxurious lifestyle (it takes away from the music) . Music industries have chosen the popular music, not the people, and iTunes is offering a variety that is unprecedented to the record stores of the last decade. I'm not saying iTunes is our godsend, but it'll create an equal playing field between industry and fan. We need to take the inordinate "profit" our of pop.
  • Erm... no (Score:3, Interesting)

    by spoco2 ( 322835 ) on Thursday June 15, 2006 @12:30AM (#15537729)
    Except, if you'd read the article, his last album costs $11.88 on iTunes, and $14.98 as a CD on Amazon. That's only $3.10 difference... with physical media, liner notes and cover. (I still far prefer CDs to downloads).

    That's in NO way VASTLY overpriced.
  • by termite12 ( 247870 ) on Thursday June 15, 2006 @12:43AM (#15537796)
    Why is Al even messing with this?

    1. It costs effectively nothing to record these days. Case in point: th-recording-music-is-basically-free []
    2. It costs nearly nothing to distribute digitally (insert long tail reference here)
    3. Marketing costs money...but wait, we've all heard of Weird Al, so he doesn't need much marketing anymore.

    He should be doing this himself. Period.

    UHF Rules!!!!
  • by grahamsz ( 150076 ) on Thursday June 15, 2006 @12:46AM (#15537807) Homepage Journal
    I checked your music out on Yahoo music... not really my cup of tea, but maybe you'll get a few pennies.

    What's interesting is that i'd never have known what your scale was. Apart from having your name listed as "Label" i'd never have known that I wasn't listening to a professionally prdouced album.

    This begs the question of why established artists aren't flocking to CD Baby when their contracts are up. It wouldn't hurt many artists to not be found in Wal-Mart. It's a little risky, but if I could increase my income 10-fold, i'd take that risk in a minute.
  • by Overly Critical Guy ( 663429 ) on Thursday June 15, 2006 @01:46AM (#15537987)
    It's been said before, and it has to be said again--the RIAA is merely a lobby group that represents the labels. The RIAA has nothing to do with Weird Al's contract; his label does. People have been mindlessly referring to "the RIAA" for so long that they think it's interchangeable with the music industry and any and all record labels.

    This is a contract issue between Weird Al and his label. However, I expect most of the Slashdot discussion to devolve toward another generalized music industry bashing session instead of focusing on the actual topic here of Weird Al and his label contract...
  • Re:Cuplrit? (Score:3, Interesting)

    by Firehed ( 942385 ) on Thursday June 15, 2006 @02:26AM (#15538090) Homepage
    That may be true, but something tells me they won't get $2.50 of a $9.99 album sale - they don't take a flat percentage, it tends to be something like 20c + 5%. There's a reason that where I work we won't run cards for under $3.00. Back when I sold stuff online, I'd always lose the largest percent to the card carrier on the smallest orders. The problem is that we still don't have a good system for micropayments. Aside from two non-CC'd paypal accounts transferring existing funds between accounts, I suppose.

    I don't know exactly where the CC fees factor in, but I've read that the breakdown per song is roughly 70c to RIAA/label, <5c to artist, rest to Apple (which probably doesn't cover too much beyond bandwidth costs). Of the about 75c that's not going to Apple, doesn't it only seem fair that the artist get at least half of it, considering neither one is paying distribution costs? Under 7% seems just a shade low.

  • Re:Well duh (Score:3, Interesting)

    by lasindi ( 770329 ) on Thursday June 15, 2006 @03:00AM (#15538172) Homepage
    CDs are vastly overpriced.

    Um, could you tell me exactly what you mean by "overpriced?" If they set it too high, people won't buy it and they make less money; if they set it too low, they make less money. So they set it at a price in between. This happens in every industry. Record companies are setting CD prices where they are because a *lot* of people think that CDs are worth $10. You might not (I don't either); that's okay, we don't have to buy the CDs. But "overpriced" is a relative term: you and I don't set prices; the general public does.
  • Raw end...hah! (Score:5, Interesting)

    by Elemenope ( 905108 ) on Thursday June 15, 2006 @06:56AM (#15538629)

    But, here's my thing. Saying that a wildly successful artist (like Weird Al definitely is) is aggrieved by a distribution that, OMG, reduces the profit per sale of his songs, is like saying that professional baseball players are aggrieved when there is a absurdly high salary cap installed; yeah, its technically true in the sense that they aren't quite as filthy rich as before, but I won't weep that much for them.

    OTOH, there are those artists, let us call them the 'filthy rabble (tm)' who aren't successful, and under normal circumstances wouldn't generate enough sales potential to justify to a record label the cost and risk of publishing their work. For these folks, an electronic distribution model is the only likely way for themto ever hope to get content to potential consumers.

    Point the third, its not like sucessful artists don't have leverage when dealing with major labels. Volcano, which is Weird Al's label, was embroiled, for example, in a contarct dispute with Tool, another wildly successful band. Tool, after a protracted argument, prevailed in most of the ways that matter. Artists can leverage their potential future sales to benefit them in contract negotiations, and they do it all the time.

    There is plenty to complain about in the music industry, and the RIAA and the labels on behalf of whom they lobby are in many ways foolish in their relatively unenlightened pursuit of bare self-interested greed, but this, I do believe, is not a good example of that trend. It is simply a successful artist going through the relatively painless 'pain' of adjusting to a new distribution paradigm. There are better thinsg to complain about (like pushing very short sighted DRM schemes that treat all customers like would-be criminals rather than treating them, oh I don't know, well). P.S., I like Weird Al's work; he's a hell of a satirist.

  • What do record companies even do these days?

    Pay to produce an album? A high quality recording can now be produced in a home studio for signifigantly less then it used to cost. A band can now afford to produce its own album.

    Distribute the album? Traditional record stores are becomming irrevelent. A physical CD can be easily sold and shipped using a turn key e-commerce site. Distrubiting music via the Internet is a pretty painless task (as long as you don't mess with DRM crud).

    Promote the album? I suppose your typical artist can't afford the legalized payola record companies pay to radio stations to get airplay, but then again who listens to terrestrial radio anymore? With satelite and internet radio, which offers a much better (read: not bought and paid for) playlist, an artist has a greater chance of being exposed if, you know, they're actually good.

    The question is this: Since the role of the record company is increasily becomming obsolete, why on earth would an artist want to deal with the indentured servitude, low percentage of sales, or lose ownership of their own work?

    I can easily see the giant record companies be replaced with artist management companies which help the artist with inexpensive but effective promotion, orginizing tour dates and making deals with various distribution channels. The difference being that the artist management company represents the artist and exclusivly promotes the artist's interest, and ensures that the artist receives the bulk of the profits.

    I can't wait to see a small-time artist get approached by a major label, fully expecting the artist to be wowed and grateful to get signed, and hearing 'no thanks. I can do better and make more money on my own'. It's coming.
  • by Warlock7 ( 531656 ) on Thursday June 15, 2006 @08:08AM (#15538813)
    If the artist makes a bad deal with their label it isn't fair to pin the responsibility for this on Apple. It's between the label and the artist to work out the problems with the contracts. Weird Al says:
    ...I actually do get significantly more money from CD sales, as opposed to downloads. This is the one thing about my renegotiated record contract that never made much sense to me.

    Grant Robertson, the author of the article [], is using a certain level of sensationalism to push his story. Weird Al never said the phrase "Raw Deal" in his response to the question posed by Tim Sloane of Ijamsville, MD, that was an addition to the story by Grant.

    Aside from that Grant goes on in his story to say: actually own the CD. You're really just kinda leasing the songs with iTunes...
    Technically this is true and not true at the same time. You own the CD, you license the music contained on that CD and you license the music from iTunes. The terms of the license agreements aren't the same, but you still license both forms of the music. More misrepresentation used to slam Apple...

    Why is Slashdot being irresponsible about how they're posting their stories? It seems that sensationalism is the way to try and get hits these days. If it was a story about how Apple is screwing their clients, as is purported by the story here on Slashdot, then it gets people clicking and angry. If it's a story about how the RIAA is screwing people over then it gets people clicking and angry. But a story about how an artist worked out a bad deal with their label, that might not sell here on Slashdot.

The intelligence of any discussion diminishes with the square of the number of participants. -- Adam Walinsky