New York Times published an article covering the issue of artist royalties in digital media distribution and it really doesn't seem good for artists.
According to article, most of the labels have licensed artists' music to subscription services such as Pressplay and MusicNet without asking a permission from the artist. And older acts who don't have additional clause in their contracts that allows labels to publish music over the Net, are obviously pretty angry about this and have already sent out cease&desist letters to subscription services to remove their music from the service.
The problem is that labels are not willing license the music from the artists to use on the Net, but pay royalties instead. Why this is important? In normal licensing deal, artists and labels split the profit 50/50, but by using royalty payments that are used for CD sales as well, labels can keep appx. 90 per cent of the profit and artists have to pay packaging fees(!) and promotional expenses from their share which is ridiculous because we're talking of pure Internet licensing deal in here.
You can read the full article from Yahoo.
The problem is that labels are not willing license the music from the artists to use on the Net, but pay royalties instead. Why this is important? In normal licensing deal, artists and labels split the profit 50/50, but by using royalty payments that are used for CD sales as well, labels can keep appx. 90 per cent of the profit and artists have to pay packaging fees(!) and promotional expenses from their share which is ridiculous because we're talking of pure Internet licensing deal in here.
You can read the full article from Yahoo.
