Earlier this year, Apple finally agreed to strong pressure from the major record labels to introduce variable pricing on iTunes — which officially would make some popular songs $1.29 and (in theory) also offer older, back catalog songs for $0.69. In reality, it’s pretty difficult to find any of those $0.69 songs. However, as a musician, which would you prefer? Well, as Shocklee alerts us, most musicians might not see any of that additional fee (that report is a little misleading, though, in that it suggests — incorrectly — that all songs were driven up to $1.29). I have to admit that I’m a bit surprised by this, and wonder if it’s really accurate. The telling quote in the article is this one:
“Artists receive fixed residuals for music sales based on individual contracts via their respective record companies,” says Max Clingerman, a music executive for MixJam Records who explains “the staggering price increases are not for the artist interest, rather intended for executive pockets.”
While I’m sure the intention was very much for exec pockets, I was under the impression that most major label contracts included royalty rates based on retail price. And while most signed musicians never recoup their advance, and thus never see any royalties whatsoever (no matter what the price), I do wonder if it’s really true that musicians don’t get a larger cut of higher priced digital sales (at least in the fictional accounting systems the labels use).
Of course, the larger point made by the article is almost certainly true. In increasing the price to $1.29, the demand for such songs has been driven down significantly, leading people to look for alternative sources for the same music.
Permalink | Comments | Email This Story
