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Copyright Board decides to leave music royalty rates unchanged

Thursday, October 2, 2008 · 5:44 pm · 32 Comments

“The federal Copyright Royalty Board left the rate for royalties paid to songwriters for CDs and digital downloads unchanged,” the Associated Press reports.

“The ruling keeps the rate at 9.1 cents per song,” AP reports.

“Apple Inc. had threatened to shutter its iTunes store if an increase in the rate jeopardized its profitability based on a price of 99 cents per song,” AP reports.

Full article here.

[Thanks to MacDailyNews Readers "Fred Mertz," "JES42," and "MikeK" for the heads up.]

Looks like they thought better of killing the golden goose. Chalk up another win for Steve Jobs and music consumers.

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Comment Feed

32 Comments

1 2 Next »

fred johnsen

Thursday, October 2, 2008 - 5:50 pm · Reply

& chalk up another loss for creators of music – & intellectual property in general.
msr

Thursday, October 2, 2008 - 5:51 pm · Reply

It’s really not fair that the artists get such a small portion of the revenue, but who cares? Indie artists get everything they deserve.
Sea Change

Thursday, October 2, 2008 - 5:52 pm · Reply

Perhaps we’re beginning to see some youth in the organ i zation

(under 40)
msr

Thursday, October 2, 2008 - 5:52 pm · Reply

Which is to say they don’t have to give ANY money to a label.
boyweho

Thursday, October 2, 2008 - 6:10 pm · Reply

I personally wasn’t against the rate going up, or even of Apple no longer selling music; songwriters should get a raise like everyone else, whatwith inflation and all. That raise should come from the record labels, because frankly, what do they do?

What are their expenses in the digital distribution model? The record labelse aren’t hosting these songs and paying for the bandwidth; they aren’t paying for packaging, shipping, handling or postage, or sales people’s salaries and benefits.
MikeK

Thursday, October 2, 2008 - 6:10 pm · Reply

Thanks MDN, you’re my friend!
TheConfuzed1

Thursday, October 2, 2008 - 6:12 pm · Reply

Hopefully now internet radio can take a deep sigh of relief.
TheConfuzed1

Thursday, October 2, 2008 - 6:18 pm · Reply

@boyweho–

I too, am in favor of a measurable financial increase, for all who are deserving, in a reasonable amount of time.

However, this isn’t the time for it. Maybe you live in a plastic bubble, but the financial world is falling apart around us as we speak.

Most of us should be happy to keep our jobs.
JES42

Thursday, October 2, 2008 - 6:19 pm · Reply

Here is a link to an article at Fortune giving a lot more information and breaking down how the $ are split.

http://money.cnn.com/2008/10/02/technology/ituneswins.fortune/index.htm?source=yahoo_quote
oh no my shorts

Thursday, October 2, 2008 - 6:20 pm · Reply

Chalk up yet another reason for artists to NOT do deals with the greedy bastard major record labels.

Sign a deal with an indie label or distribute yourself, and this won’t be an issue. You’ll get your publishing royalties and there won’t be a label hanging over your shoulder, sucking the lifeblood out of every unit sale you make.

Honestly, fred johnsen, I don’t understand how you can not get this. It’s not Apple at fault here.
Brad Kelley

Thursday, October 2, 2008 - 6:26 pm · Reply

With all due respect to Apple, I suspect their statement about “closing the store rather than raising prices” had absolutely zero effect on the decision. It shouldn’t have. There are plenty of other stores would would fill the vacuum in a heartbeat.

boyweho: It has nothing to do with artists getting an inflation-indexed raise like everyone else. Their royalty payments in this case are based on a percentage, so the amount does go up when they sell more.
KL3V3R HANS

Thursday, October 2, 2008 - 6:29 pm · Reply

Price of a used Mac computer for sound track editing: $500

Price of a domain name to host your own music label: $100

Price of registering your own record label company: $50

….Watching millions of artists starve because they’re giving 9/10s of all profits to a middleman promising riches… – PRICELESS.
joey

Thursday, October 2, 2008 - 6:41 pm · Reply

Hmm, do I smell an orchestrated response going on. Well, if it quacks like one and complains like one and squeals like one… Jeesh, at least spread your responses out so that its not so damn obvious.
Predrag

Thursday, October 2, 2008 - 6:45 pm · Reply

For the lazy ones who didn’t bother going to that CnnMoney article; here’s the split between Apple, labels and the artist:

Apple: 29c (making about 10c in profits, after infrastructure expenses);
Labels: 61c
Artists’ publisher: 9c

Obviously, the label gets twice as much as anyone else, with the artist getting peanuts. The 9c that goes to Artist’s publisher is further split between the publisher and the artist.

Labels’ expenses here are only marketing. They quickly recover the cost of studio production from the artists’ share, so it is difficult to comprehend the level of greed that these labels have.

Now, if you are an independent artist and publish your iTunes stuff through distributors, such as CD Baby, or similar, you, the artist, receive some 65c for each 99c track you sell (I’ve been doing it for quite some time). You obviously aren’t going to sell as many tracks as a signed high-profile, label-backed act, but you’re at least getting 10x more per song than that high-profile act. And you aren’t making some idiot MiddleBronfman rich in the process.
Predrag

Thursday, October 2, 2008 - 6:56 pm · Reply

The right thing to do here was for the royalty rate to be changed at the expense of the labels’ share. Not because the artists deserver the raise due to the inflation (as was said, their raise is proportionate to the pricing increases and sales volume), but because their share of the pie is just miserably small. Obviously, that didn’t fly, so they just left everything unchanged.

Considering that our economy is in rather poor shape right now, it would be unfair to raise this rate for performers, while everyone else is taking a pay cut or losing a job. Eventually, though, work should be done, and Apple might be the right entity to champion it, to increase the Artists’ share in the revenue, at the expense of the labels.
Register or Login

Thursday, October 2, 2008 - 7:02 pm · Reply

Since they’re nearing ultimate domination, expect Apple to charge a fee to labels for infrastructure costs in the coming years.

That’s what scares the hell out of them.
MikeR

Thursday, October 2, 2008 - 7:20 pm · Reply

@Register or Login
I like that. Charge them about 62%.
dorothy thissen

Thursday, October 2, 2008 - 7:47 pm · Reply

I think Steve should raise every song to ten dollars each and then sit back and laugh at all the illegal activity that would follow. When they came crawling back, offer to put the songs back in the store for 19 cents each.
tt

Thursday, October 2, 2008 - 7:49 pm · Reply

HA HA!

WE WIN!

jsut try it again and see what happens.. you will start to lose millions on day one of our bullshit!
careful what you wish for

Thursday, October 2, 2008 - 7:54 pm · Reply

Since they’re nearing ultimate domination, expect Apple to charge a fee to labels for infrastructure costs in the coming years.

I like that. Charge them about 62%.

This would place Apple’s ethics on par with Microsoft’s.

Is this the future we want?
alansky

Thursday, October 2, 2008 - 8:25 pm · Reply

& chalk up another loss for creators of music – & intellectual property in general. —fred johnsen

What an ignorant comment! The songwriters need to be pounding on the music publishers’ door, not Apple’s. Music sellers are not responsible for the lousy deal that artists have been getting from music publishers for decades. Trying to make up the difference by holding up the merchants who sell the music is just plain wrongheaded.
MikeR

Thursday, October 2, 2008 - 9:42 pm · Reply

@careful what you wish for

M$ would have demanded 100%. Apple is very fair!
CDR

Thursday, October 2, 2008 - 10:06 pm · Reply

maybe if people start using the genius function for finding and buying new music, indie artists will be more succesful and will encourage new artists to avoid the labels.
Another Distraction

Thursday, October 2, 2008 - 11:49 pm · Reply

Since the entire iTunes, iPod, iPhone success story has not contributed a single thing to slow the dramatic collapse of the value of APPL shares, why the hell do I care if Steve shuts the store down or not?
Brad Kelley

Thursday, October 2, 2008 - 11:57 pm · Reply

That’s the strangest thing I’ve heard all day. The success of AAPL shares over the last five years is in no small measure directly DUE to the “entire iTunes, iPod, iPhone success story” you refer to.

But to address you question, in my mind there is no reason to care if the iTunes Music store shutters.