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Do illegal downloads mean lower revenue/royalties for the artists?
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| Storyteller |
Because of the "Sorry - where is that post about needing a billion downloads to earn a low wage?" topic I got pointed towards a discussion on another forum titled "Do illegal downloads mean lower revenue/royalties for the artists?".
My view on the case as I posted over there:
| quote: | The answer lies in the middle. Royalty collection societies and other exploiters (record labels, publishers) of course say yes. Which is true to some extent. But that depends on how an illegal download is defined. Is it illegal to download an album to check if you like it and from there to go on and buy it? Yes, but in this case it is actually that last push the offender needed makes a purchase. Happened to me countless times. I only acquire my music through legal routes now and have next to no mp3s/cd's in my collection that have an illegal origin. All the old mp3's I had have been converted to album and single sales as cd or a digital file. This probably doesn't go for the majority but it is important to see how biased rights collectors, labels and publishers are. Usually they don't take the above example into account in their research as it only lowers the calculated losses and ruin their lobbyist campaigns for copyright laws.
The music industry itself is rotten to the bone. I've never seen a penny from my royalty collection society for instance. Registered airplay on radio channels, proven sales on online portals and youtube. Everything goes to the big cheeses, not a penny to the ones that are less fortunate. The only ones that are somewhat doing their job are the record labels, but those are far from good.
Apart from 2 labels I've worked with none has actually held up to their own contracts. Usually it requires them to send me semi-annual statements (sales figures and the money they owe me). Apart from those 2 nobody does this! One of these labels is part of what is considered to be the biggest dance music record label in the industry worldwide. I got my statements 3 months late once after asking repeatedly. They just hope you'll never ask and keep the cash! Technically a breach of contract worth sueing for. But unfortunately, like just about anyone else, I don't have the balls nor the cash to permit myself that luxury. Otherwise I would.
I had this negotiation phase about a contract once and said I wanted a bigger cut. They explained to me that they couldn't afford to pay me any more. This was a 14% cut on profit for that specific single. 5 Years ago (as a starter with no track-record whatsoever) I easily got 50% out of gross single sales. I started out making about 50 eurocents per sold single, which now has dropped to about 7 to 20 cents.
The cause to that problem, in my opinion: the man in the middle. Seperate business entities keep being added in between every step of the chain between signing the music signed and getting it out in the shops. Of course they all take their cut or a fee.
Short term solution for artists? Remove the middle-man. Do everything yourself. You'll get 100% instead of those 14% deals. Get your own deals with online stores, do your own promotion. If signed to a somewhat smaller label it will be possible to acquire equal sales and thus sevenfold your income. And if you're not doing a good job at promoting yourself you only need 1/7th of the sales for the same results from a financial point of view.
In the meantime most (big) labels stopped doing actual promotion to save costs. They sign and put out whatever they can hoping they've got that one hit and otherwise just able to scrape together all the revenue. Especially the big ones spit out re-releases just about every few months of almost their entire catalogue to get something extra without putting in too much effort. Investments should be kept to a minimum. This whole industry has switched into survival mode. They're not willing to take on new business challenges, they just want to stay afloat. All newly introduced costs are affectively being calculated and withheld from the artist's rightful income by paying out royalties based on net profits. It's not the illegal downloader that is picking the artist's wallet, it's the companies they deal with.
A friend of mine works for a top10 DJ. This means his employer is one of the 10 most wanted dj's worldwide and get's paid 5 figures by the hour. Yet, with the audience he has at hand, his record label is not profitable. I think that's a reason to be concerned about your income as an artist. The sole reason that label exists is because the DJ in question believes in the music he's representing and he feels that it is worth the effort. Obviously performing is currently the 'easiest' way to generate income.
Cause of the problem and lower revenues in the end is the industry itself. It's rotten. The record labels should have hopped on the mp3 train a long time ago. They should stop battling illegal content provider and instead use that money to develop a product that can outcompete the illegal sources. I'm pretty sure it's possible and economically viable if well thought through. |
Maybe some other artists/label owners here are able to shed some more light on this issue. I'd love to see how others experience this matter. Flame on ;). |
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| G-Con |
More a comment regarding your post than the title question but to give my own experience on what artists get from legal downloads:
I had a release signed with Cloud 9 Dance a few years ago. For anyone that isn't familiar with them, they are (or were back then) a major label.
The contract gave me 16% of the net profit after everyone else has had their cut. Another words, jack . But they were a big label so I thought the connections and exposure they could give me justified the crap royalty rate.
A few months after release, I had heard nothing so emailed them asking for statement. Replied telling me the statements were a little late.
Couple more months pass, I email again, and get similiar answer.
Several more emails over the course of another 6 months and still, no statement, no payments, nothing.
I have long since given up and frankly no longer care. But it gave me a good insight into the industry, realising that any money I pay for downloads either won't ever reach the artist or if it does, it will be a small amount to the point of being insulting.
Whilst I know there will be people with more positive experiences, I have a strong feeling I am far from alone in the way this was handled. |
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| Storyteller |
Cloud 9 = Armada.
Same office, same PO box, partially same people. Just a different LLC. We're talking about the same btw. |
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| Coyke |
I would like to throw in another point that has a lot of importance to me at least in this whole discussion.
Why would costumers pay for a song that is made using illegal downloads too?
Seriously, seeing how many established producers are using cracked software is making this whole discussion sometimes a huge contradiction. For myself, as a producer AND a fan. I sometimes feel weird diving into discussion like "oh just download the crack" or "just download the song". Feeling I'm part of the minority.
So why do I say that?
There is an overall strange attitude around. Labels and producers are a part of that. There should be a proper control about certain aspects, regarding the release of music. Especially when money is involved. Then again, a lot of the over-compressed, cheesy stuff around isn't for me anyway. I rejected all agreements and just enjoy music making for myself or to record a DJ Mix sometimes. I don't really care for getting a release out there. Not for the people that run labels and not for "listeners". |
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| Storyteller |
| quote: | Originally posted by Coyke
Why would costumers pay for a song that is made using illegal downloads too? |
Couldn't agree more with what you're saying but that is a while discussion on it's own and I'd rather assume (even though it's completely false) that artists have legal software. Just for the sake of keeping this discussion on track. |
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| cryophonik |
| quote: | Originally posted by Storyteller
Short term solution for artists? Remove the middle-man. Do everything yourself. You'll get 100% instead of those 14% deals. |
There was an interesting story on NPR (National Public Radio, a liberal radio/news station in the US) last week about a guy doing just that:
http://www.npr.org/blogs/money/2011...-star-tells-all
(you can listen to the full interview by clicking on the icon at the top of the page)
| quote: | Originally posted by G-Con
I have long since given up and frankly no longer care. But it gave me a good insight into the industry, realising that any money I pay for downloads either won't ever reach the artist or if it does, it will be a small amount to the point of being insulting.
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Yup, I've encountered the same situation here. It almost makes me want to download the tracks for free and just send some cash directly to the artist's PayPal account. |
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| clay |
| not in my case. lower than zero? well i did pay for one track to get on iTunes so well, id actually earn more (from minus to zero) if it was just pirated. |
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| Magnus |
| Great thread here. Reading Storyteller's post and then all the responses basically confirms my exact experiences as well. It is nice to know I'm not alone. |
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| clay |
oh and i run a label. i still havent "earned enough" to even be able to invoice them. i might as well just give it all away for free, sending wavs and mp3 all over the place. thats my next move, gonna do some crazy spamming once i have a new alias out. watch out. im not into the game for any money at all.
and for my releases on other labels? havent got for it so why bother? they cant even seem to promote it right so you might as well do it all yourself. atleast until you are above decent which im clearly not lol. |
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| DJ Robby Rox |
This thread is a waste of time imo. No offense to the OP.
Its clearly known that artists who solely produce don't make in this industry. Even bigger names don't make anything, take Blueman for instance, its the whole reason he stopped making trance.
If you get into this industry to make money, then you're an idiot. I'm sorry but you are. So I don't think illegal downloads hurts the artists, they had no real chance in the first place. I'm more likely to buy a track from an artist that doesn't even have a label. I've even tried to buy tracks off people on here that don't have labels. My whole philosophy honestly is labels and DJs. If producers as a whole stopped distributing their music in the first place, we could lock up the entire industry and put control in the hands of where it belongs.
Although thats somewhat utopian hippy type thinking. But no it doesn't hurt them imo. |
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| EddieZilker |
| quote: | Originally posted by DJ Robby Rox
My whole philosophy honestly is labels and DJs. |
One of many reasons I'm kind of done posting in here, for the time being. |
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| clay |
| quote: | Originally posted by DJ Robby Rox
Blueman for instance, its the whole reason he stopped making trance. |
another blueman thread. face it, he sucked and therefore didnt make money. |
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