“Music managers will today wade into the row over online royalties with the claim that bands and solo artists are being unfairly squeezed in the digital era,” Dan Sabbagh reports for The Times. “The Music Managers Forum is unhappy that artists typically receive a royalty of 4.5p on every 79p track sold on Apple’s iTunes, a proportion of less than 6 per cent. On a £2.99 single, the performer’s royalty is 35p, or 12 per cent.”

“Jazz Summers, the manager of the Snow Patrol, and chairman of the Music Managers Forum, said: ‘Sale prices and royalties have gradually been eroded to the point where an artist needs to sell in excess of 1.5 million units before they can show a profit, after paying for recording time and tour support.’ Mr Summers said that the squeeze on artists is a by- product of a record industry “that has been caught with its pants down” by the emergence of digital. His group’s complaint is that the major labels have handed pricing power to the download retailers because they have not come up with an online distribution model of their own,” ,” Sabbagh reports.

“The MMF wants to improve artist royalty rates, complaining that the music industry has cut fees in an attempt to maintain its own profitability. The record companies often force artists to accept a ‘new technology’ discount on their royalty rate of about 25 per cent — replacing a now outmoded discount that was intended to reflect the cost of packaging a CD,” Sabbagh reports. “Unhappiness with Apple’s flat 79p a track pricing exists across the music industry, but the Californian computer company has been so dominant in the download market that it has been able to set rates. Last month Edgar Bronfman Jr, chairman and chief executive of Warner Music, described Apple’s policy as ‘not fair,’ arguing that pricing should be flexible, reflecting the popularity of the artist.”

“The new MMF complaint emerges alongside another related royalty dispute that is pitting Apple, other internet music retailers and the British Phonographic Industry (BPI) against groups representing songwriters, the Mechanical Copyright Protection Society (MCPS) and the Performing Rights Society (PRS). The MCPS/PRS wants to receive 12 per cent per song — discounted to 8 per cent for two years — rather than the existing 8.5 per cent, but the scheme has been challenged by Apple, the BPI and other online retailers before the Copyright Tribunal,” Sabbagh reports. “The Music Managers Forum is backing the MCPS/PRS alliance. ‘The BPI is jumping into bed with a group of digital music retailers, which are in the process of eating our lunch,’ Mr Summers complained.”

Full article here.

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Eliminate the middlebronfman. Apple isn’t the problem. Apple is the solution.

According to most reports, record labels take 70 cents for each song Apple sells for 99 cents. Apple spends almost all of their 29-cents on bandwidth, iTunes operational costs, and marketing.

Flash forward a few years: Apple has settled with or bought Apple Corps. Apple signs Snow Patrol. Snow Patrol gets far more than the mere 12-percent they so longingly dream of today.

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