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Managers and Royalty collectors bite iTunes

3 October 2005 12:57 by James "Dela" Delahunty | 12 comments

Apple's iTunes is once again coming under fire from the same music industry that thanked it just two years ago for providing a real alternative to P2P piracy for consumers. This time it is artists' managers and royalty collectors that are taking a shot at iTunes. The belief basically is that Apple is not properly re-compensating artists. The Music Managers Forum (MMF) is complaining about the 4.5p performers receive from 79p download sales at iTunes in the UK.

That's about 6% of the cost of the download, less than half what the performers get from single sales on physical media. �Sale prices and royalties have gradually been eroded to the point where an artist needs to sell in excess of 1.5m units before they can show a profit, after paying for recording time and tour support," Jazz Summers, MMF chairman and manager of Snow Patrol, told the Times newspaper. Also the Mechanical Copyright Protection Society (MCPS) and the Performing Rights Society (PRS) want to increase the royalties for writers to 12% from the 8.5% rate of today.

Recently, Tim Clark, co-founder of ie:music, said that iTunes was only giving artists about 3-4p for every music download. However, is Clark complaining about the right people? Actually he is not. iTunes, Napster, Wippit, Virgin etc. are all just retailers whereas performance royalties are negotiated by labels and artists' managers. Summers however understand this fact and said that the record labels had been caught with their pants down when they accepted the pricing policies put forward to them by Apple.

He believes the labels accepted it due to fear of the massive amounts of illegal music sharing on the Internet. We reported also last month that Edger Bronfman, Warner Music CEO, said that Apple's prices were unfair and that the company should open up to variable pricing models instead of the current 99c (79p) pricing policy being safe guarded by Apple. He was responding to comments made by Steve Jobs that accused the labels of being greedy by wanting to increase the price of music downloads.

Jobs warned that such a move would be enough to push many of the legal music downloaders back to P2P networks to download music free again.

Source:
The Register

Permalink to this article

Labels tell artists 'we gave your money to our lawyers' (2 March 2008)

Will record labels force variable pricing on iTunes? (3 April 2006)

Apple will make another announcement on Oct. 12th (4 October 2005)

Music downloaders spent $790m in H1 2005 (3 October 2005)

Warner Music Group CEO hits back at Steve Jobs (25 September 2005)

Steve Jobs blasts greedy record labels (20 September 2005)

Apple unveils iTunes phone and iPod Nano (8 September 2005)

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Discuss this article!
Daniel_G (Inactive) 3 October 2005 13:22
Yet another piece of evidence showing the greed of the music industry... rather sad, really... [ + quote]
Ofnir1 (Senior Member) 3 October 2005 13:52
It's always been like that. Get a man in a high priced suit and show him the money... [ + quote]
GrayArea (Member) 3 October 2005 15:00
"Tim Clark said...the record labels had been caught with their pants down when they accepted the pricing policies put forward to them by Apple. He believes the labels accepted it due to fear of the massive amounts of illegal music sharing on the Internet." Did he have a straight face when he said this shite? Big bad Apple intimidates the major labels? What an obvious crock o' stinky. It would be funny if it was not so stupid. Just another sad attempt to deflect criticism and get their agenda of raising the price of "hit" songs pushed through. [ + quote]
gamename (Senior Member) 3 October 2005 15:13
thank god... i didnt buy an ipod. the really sad thing is that all of the people who did are expecting the same if not better service. i mean after all the mp3 player i bought was half the price of an ipod and plays just as well. well it looks like apple (jobs) is between a rock and a hard place. i think he will have to give in sooner or later , because of all of the people who paid alot of money for ipods. [ + quote]
Lethal_B (Moderator) 3 October 2005 15:14
well if prices rise, they will be back where they started from! [ + quote]
nonoitall (Member) 3 October 2005 15:24
The recording industry is so full of hypocrites it's sickening. I guess being unfair to artists is okay, but only if the almighty recording industry gets a piece of the action (money). [ + quote]
evilh0ly (Senior Member) 3 October 2005 18:40
even now 99c is too much for me. plus i can't stand the stupid DRM shits that comes with it. such bs. [ + quote]
evilh0ly (Senior Member) 3 October 2005 18:43
also i can't play songs i bought @itune to play on my creative only on my ipod, which is also fcukin me up that's the only reason i'm stilling using p2p programs. [ + quote]
Reasons? (Inactive) 3 October 2005 19:25
I use itunes to buy afew songs here and there, if the price goes up, it's staright file sharing for me, enough is enough. Sorry, loser high school drop out guitarists, I'll just have to steal your music now, just like you had to, to pay for that heroine. [ + quote]
venomX05 (Senior Member) 3 October 2005 20:58
Quote: Jobs warned that such a move would be enough to push many of the legal music downloaders back to P2P networks to download music free again. Sorry Mr. Jobs...been there and STILL doing THAT! :P [ + quote]
Azteck (Newbie) 3 October 2005 20:59
This crap is pushing me to reconsider even buying a few songs on Itunes. I will proceed as normal dowloading for GRATIS.... As for the Ipod no big deal I just converted every I bought to mp3 format. I just burn it and rip it using the same Itunes software, that way I can play it using any software and on any computer. I hope they realize that they are going to push people back to file sharing when prices start going up. [ + quote]
Steve83 (Member) 7 October 2005 9:40
"...royalties have gradually been eroded to the point where an artist needs to sell in excess of 1.5m units before they can show a profit, after paying for recording time and tour support." So obviously, the recording studios & tour managers/marketers/etc. are taking too much from the artists. Cut their shares, and leave the price of the music alone. [ + quote]