Bands sue Sony for massively underpaying music-download royalties

[smtkr]

So, you're going to call me a retard because I've pre-ordered a PS3?

... *waits*

I already did.

[Bob Crabtree]

I already did.

A smart answer but, I fear, not the one that was wanted or even expected.

Oh, and I've already zapped one of your postings in this thread, please ensure I don't have to do that to any more of them.

Bob

[Stoo]

I already did.

... and with that you've just proven yourself incapable of having an adult and intelligent conversation.

If you think Sony is any worse than any number of companies you're sorely mistaken.. Microsoft is renouned for questionable business practise and ethics, as are EMI, BMG, etc etc.

Numerous talented individuals have worked their collective asses off in the music industry, only to find out they are actually in debt/bankrupt because of their publisher, owing money all the way up and down the supply chain for making their contracted albums.

In fact, if you made a pact never to by anything that exploited another individual in it's production, you wouldn't have squat. Everything from the clothes that you wear, the food that you eat, the car that you drive, even the materials your house is made from, has had a negative impact upon someone somewhere along the line.

As TheAnimus said, most of us can realise the distinction between the various branches of a company (which is inevitable given globalisation), and can make an informed decision.

Say that you have a beef with Ford, and refused to buy any of their cars, does that also mean that you'd never buy a Jaguar? Or an Aston Martin? Volvo? Mazda? Lincoln? Land Rover?

It's the same difference.

[Funkstar]

Add to that all the companies that Ford supply engines and gear boxes to.

With Sony, you would be excluding yourself from buying Nikon cameras and other manufacturers too. Sony are one of the worlds largest sensor manufacturers after all.

[Steven_LP]

First of all a disclaimer: I dont work for Sony, but I do work in the music industry.

I suspect that the way these artists have been accounted for royalties generated from online income streams is because of how their original recording contracts were negotiated, and not because Sony wanted to exploit them (and I'm saying this with the tongue in my cheek).

Back in the days of vinyl, breakages in transit were quite common, so a 'packaging deduction' was introduced in recording contracts. And because there were only physical sales in those days, sometimes shops returned unsold stock, hence the 'retention against sales' clause. Obviously formats have changed in the last few years, but it's up to artists to re-negotiate the terms of their existing recording contracts, to take into account these format changes.

Now, I suppose Sony could have done the 'right thing' and offered to make those changes anyway, and calculate royalties from online sales without packaging deductions or retention against returns, or indeed the artists might have tried to re-negotiate the contracts before taking them to court, but I guess Sony are there to make money, and there are signed contracts in place..

I can assure you that for any 'new' recording contracts, contractual terms for artists for online sales are much better, and they will not take into account these terms, which won't apply for digital sales.

One last point: digital sales and royalties due to the artists for those sales are a fraction of what they earn from physical sales, mainly because of the very low retail selling price..

[TheAnimus]

Steven P, i'm guessing you know the area quite well, so i'll pose this.

The only time i buy CDs, i buy them from the likes of FOPP or Amazon Marketplace (straight form USA), and they rarely cost £7 or more, for a good 12 tracks on mean average. Mabye i'll run to £10+ for say frabic live cd, but those also have more tracks.

now if i had some kind of mental illness, and decided to buy my music via say itunes, each track would cost more?

are people just buying that 1 track they like without buying the album, or are some people taking too much of the cream? I've worked in online advertising, and distrabution of data, i can't see how the costs could even begin to compete with say FOP's! How could they possibly make less money on a digital sale?

[Steven_LP]

Hi Animus, you have raised a few points / questions, which I'll try and answer..

A few years ago singles were still sold only in physical form, and a top 5 single would normally retail at anything from £ 1.99 to £ 3.69. In fact, the more popular it was, the closer it was sold to £ 3.69. It doesn't take a genius to work out that artists would make more on that as they are paid with a percentage (anything from 14% to 24%) based on that selling price.

You are right in thinking that digital sales attract less costs, but they also attract a lower margin as they are sold at a lower price, which benefits the consumer, not the label OR artists. You can add to that the fact that iTunes now dominates the market and therefore abuses that position by paying the labels (and therefore the artists) quite a lot less than what you think. Royalties due to the MCPS (mechanicals) will also become higher for digital sales in the next few months, which means even more smaller margins for the performer (not the writer) and labels (about 4%).

You mention compilations (btw you are better off buying the Fabric CDs directly from their website as they are cheaper, I have a subscription with them...). You are right, as single tracks are so easy and cheap to buy, consumers are attracted to that, and compilation sales have suffered because of that (10% year on year more or less). Nobody wants to spend £ 12 / £ 14 on 40 tracks that you might like only half of.. so people buy single tracks.

We are having an ongoing 'discussion' with iTunes to enable us to sell our compilations as a 'bundle' so that we can sell them digitally for the normal retail price that they set for albums: £ 7.99 (or near enough that), but they refuse to do that for a number of reasons (which I'll go into if you want me to). So we are stuck with trying to sell them physically, which is becoming more and more anachronistic..

In essence, artists get paid on the basis of the selling price (or the price to the shops), so if that price is smaller, they get paid less. A different situation arises for labels: the marketing and running costs are exactly the same, the only savings come from manufacturing, which, I can assure you, are very quickly gobbled up by the lower margins. The only winner is the consumer, which, in an ideal world would also mean higher sales, but it's not always that easy..

[TheAnimus]

you see another reason i'd never by music online is the lack of the artwork, the booklet. If that was supplied in a nice XML file or something it would be narly!

i guess i assumed that at £3.69 the retailer would take at least 60% (as that tends to be physical retail norm) then about 50p for man + testing.

I also thought that people like itunes would give a much bigger share because of how little money it takes to run a buisness like itunes.

as for fabric live, a mate has a subscription, so i normally nick his cds as he (and his collection) has lived 3meters away from me for the last 3 years, damn handy.

another one that "bugs" me is vynl, without starting a religous war, why release some things ONLY on that archain format? a really good plaid remix of bjork comes to mind (which it took me about 30mins to sample and de-popple).....

in short i hate the whole music industry, and don't understand why the record labels, if been screwed over by itunes and the like dont put their own online sales measure in place.

ps, thanks