AfterDawn: Tech news

Some distributors, labels angry over 99-cent Lady Gaga album sale on Amazon

Written by Andre Yoskowitz (Google+) @ 11 Jun 2011 22:19 User comments (43)

Some distributors, labels angry over 99-cent Lady Gaga album sale on Amazon On May 23rd, Lady Gaga released her much-hyped album "Born This Way," and Amazon quickly dropped the price of the digital album to 99 cents, bringing a huge amount of press to the company's MP3 store.
In fact, the deal went so well that "Born This Way" sold 1.1 million units in its first week (massive by 2011 standards) with 662,000 of those copies being digital.

There was so much demand that Amazon's normally unflappable servers experienced some downtime, adding to the media coverage of the promotion.

Amazon and Lady Gaga were certainly happy, but it appears that the labels and some independent distributors were not.

Merchants have already told Gaga's label, Interscope (part of Universal Music Group) that they will need to return physical CDs, and UMG already shipped 2.1 million CDs before the street date. The label will likely see 400,000 returns, says THR, a rather large number given Lady Gaga's popularity.

Says one independent distributor:

This was a really bad move. Ninety-nine cents is almost free.


A UMG exec added:

There are going to be times when music is the toy in the Happy Meal. If Amazon tries to turn 99 cent superstar albums into a regular thing, I would be outraged.


Amazon lost $3.3 million on the promotion but has likely signed up many tens of thousands of new users to its service, which was the point.

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43 user comments

111.6.2011 23:14

Finally, the record industry got the big one right in the *ss. It's nice to see a recording artist that actually does the work FOR the fans, and not the label.

212.6.2011 1:02

U get more ppl to buy .99 cents album than freaking 10+ dollars u P.O.S label companies.


Being nice always has its own consequences

312.6.2011 1:19
bluejet3
Unverified new user

If Lady Gaga is happy, thats all that matters...all the distributors and the record companies can shove their comments up their a** because the amount of sales were AMAZING (apparently). If you guys really want to spend more than .99 on a highly anticipated album, be my guest, and i will find my own way to get music for cheap. and THANK YOU AMAZON! i now have 20gb of amazon cloud storage, and it only took .99 for an album that i was planning to get anyway!

412.6.2011 3:46

From what i'm hearing about this album from Lady Gaga fans, 99 cents is all it's worth.

512.6.2011 11:01

Remember folks, Amazon & the record label is going to be taking "all" of the money (however small) from that sale. Lady Gaga, I don't give a shit what your view of her is, won't see a cent from that cluster sale. That's why you're hearing such a pissin & moanin festival. Like the public is going to feel 'sorry' for them. The suits are whining because they can't buy god for the 158th time this week off another artist.

I've worked in the industry & blogged about it; I offer that you folks look it up. That's why Gaga isn't having a shit fit about the whole torrid affair. She still has a contract for the label to pay for her touring dates and such. That's because it's the "ONLY" time music artists make any money; when they perform 'live'.

So am I giggling like a third grader that has put Ex-lax on the school principal's morning pastries? You're damn right! Corporate leeches have been bleeding artists AND their customers dry for years. A dose of gross public humility for everyone in our society (in the US can't speak for the rest of the world) would probably be a good thing right about now.


612.6.2011 11:48
ghostofamzn
Unverified new user

Originally posted by LordRuss:
Remember folks, Amazon & the record label is going to be taking "all" of the money (however small) from that sale. Lady Gaga, I don't give a shit what your view of her is, won't see a cent from that cluster sale. That's why you're hearing such a pissin & moanin festival. Like the public is going to feel 'sorry' for them. The suits are whining because they can't buy god for the 158th time this week off another artist.

I've worked in the industry & blogged about it; I offer that you folks look it up. That's why Gaga isn't having a shit fit about the whole torrid affair. She still has a contract for the label to pay for her touring dates and such. That's because it's the "ONLY" time music artists make any money; when they perform 'live'.

So am I giggling like a third grader that has put Ex-lax on the school principal's morning pastries? You're damn right! Corporate leeches have been bleeding artists AND their customers dry for years. A dose of gross public humility for everyone in our society (in the US can't speak for the rest of the world) would probably be a good thing right about now.
You sir, are dumb. The labels and gaga made their standard money off this ($8.40 wholesale price sold to Amazon and Gaga taking .60-1.00 for her cut. Amazon is the only person who took a loss on this deal and they did it specifically to gain more customers and traffic to Amazon MP3.

EVERYBODY won on this deal. Indie distributors are mad because they cannot afford to take a 7.41 loss per cd sale like Amazon can.

712.6.2011 11:54

I can't believe these idiots are still trying to sell CD's. The CD is dead! At least when it comes to large scale music sales.

812.6.2011 13:02

Originally posted by ghostofamzn:

You sir, are dumb. The labels and gaga made their standard money off this ($8.40 wholesale price sold to Amazon and Gaga taking .60-1.00 for her cut. Amazon is the only person who took a loss on this deal and they did it specifically to gain more customers and traffic to Amazon MP3.

EVERYBODY won on this deal. Indie distributors are mad because they cannot afford to take a 7.41 loss per cd sale like Amazon can.

OK, I'll stand corrected on the original delineation of funds. You're right, "to a point"; so prepare for your high colonic as you sir DO NOT know what you write entirely about.

Yes, Amazon lost out on 'physical' sales. Clerical errors happen like that and somebody is going to take a severe beating of sorts for it too.

Nobody made $8.40 per album. You are daft. Plain and simple. There was no check cut for that much. What class in Economics 101 did you fail to learn that in? Even if the Album went for that, that means the COST (once again "I" teach), COST PER ALBUM (which means "no one" MAKES anything) is $2.80 (1/3 the quoted price you stated = cost)... Your math is grossly failed.

So I will go ahead and bow out of your "dumb" comment from you and continue with obliterating your diatribe of the music industry economics lesson for my 30+ years real world lesson...

So, NOW that we know a real world wholesale price to retail stores of music cds are around $2.80 which is actually WRONG, wholesale is sold in units, wholesale to Amazon being global I'm guessing here was probably closer to $1.80 +/- .05. How else do you think Wally world can take a $20 CD one day & mark it down to $5 and sell it to you? Do you "think" their actually going to sell you something & NOT make any money... please.

Yes, folks won out on their purchases, and I celebrate with them.

But "you" know SHITE about royalties & how they are paid to recording artists. .60 to a $1 per album!?! I guffaw literally at you. This is Gaga's sophomore album with the label. She may have one more before her contract is up. AT BEST... PER ALBUM... MAYBE... liberal figure, best girl on the planet and Christmas morning, .17 cents per album. LESS if she had it written into her contract that she keeps the rights to all her songs and I doubt that she does. This IS industry standard!

Most bands get .07 per album... those being one hit wonders. Folks that labels figure will only get one really good album out of, at best, will get .12 per album and them try a second album that usually goes nowhere.

How do the labels 'know' when artists like Gaga (or anyone for that matter) come around? Unlike you Ghostofamzn, they don't look at the cloths, the makeup or the immediate dialog. They look at the whole picture and surmise the statistics. Not to mention, like me, they've been at it a really gyotdamn long time!

Lesson done...
This message has been edited since its posting. Latest edit was made on 12 Jun 2011 @ 13:10

912.6.2011 14:40

Meh...I can't believe it sold so many. I personaly can't stand her music...I must be getting old (thank God!!!!)


Just my $0.02,

dEwMe

1012.6.2011 14:47

All music should go to this model...$1 for an album is about right; if all albums were like that, it would be the end of piracy (assuming it isn't loaded down with DRM...DRM always causes piracy). It would also help the performers more than anything. They make most of their money touring...and touring needs fans. Most people won't pay $15-25 for a CD from a band that they don't know...but paying $1 to get the same album as a download is no big deal. Lady Gaga was already famous, but just imagine how many new fans were created by people saying, "Hey, I have heard of her...only $1? Sure, why not?"



1112.6.2011 20:04
candsixx
Unverified new user

Ya'll Ppl Are soo Dumb If the You ppl Think Lady Gaga and Her Record Label Will just Let their album Be 99 cents And Only Get 99 Cents Noo Amazon Paid Lady Gaga The Whole Price Of the album Which is 11 Dollars For Every Album That Bought On amazon So Her and Her Labels Get The same Money If the Album Was Being Selled Regular price ! Thats Why Amazon Lost 3.3million Dollars On the deal

1212.6.2011 20:52

again in English?




ARR! Them pesky Navy! Get out of my sea!
irc://irc.villageirc.net/afterdawn http://www.pirateparty.org.uk/

1313.6.2011 4:42

so an album cost 5,98USD to Amazon. Finally I know their gross margin.

1413.6.2011 9:22

To all the labels angry about Amazon's slick marketing method......

F YOU AND THE HORSE YOU RODE IN ON!!!!

Go Amazon. This is jealously at its finest.

1513.6.2011 12:08

@ candsixx and patrick_ did the IQs just drop in relation to the water levels rising next to the river basins? Take a High School economics class... the cost of an album is not what you seem to think it is. Nor is "WISHING" for it to be; that isn't going to make it so either.

As I'm sure your folks have been trying to tell you for years, "the world is a cruel place" and the Music Industry is one of the cruelest.

So again, Eco 101... In order to MAKE money selling something... after having put everything you've got in producing something (materials, time, electricity, rent, ect...) you take all that money and multiply that times 3. That figure is the bare bones minimum amount of money you need to make JUST to "break even". I.e., an item ends up costing .10 cents, you have to sell those items for .30 cents to break even. So most companies usually multiply by 4, so they have some wiggle room.

The Entertainment Industry multiplies by 1000. This is because literally only 1 in 10,000 ever hit like a Gaga or Elvis or Michael Jackson. Plus the greed factor is just so legendary a heroin eight ball with a black hole fellatio chaser just can't touch it. Soooooooo, an album really costs about.35 cents (+/- .08) to make (because they'll whore the bulk of physical production out to China or India) and crank out a bigger profit. Remember, I said they're cruel and I damn well meant it.

So for gods sake stay in school, one of you need it...

This message has been edited since its posting. Latest edit was made on 13 Jun 2011 @ 12:10

1613.6.2011 12:47

You're IQ must be less than half of mine. You seem to know economics, but too bad you suck at math - or you don't understand the word "cost".
$3.3 million on promotion (loss) + 99c for each digital sale, having a total of 662,000 digital sales, gives 5,98USD each.

1713.6.2011 13:12
ghostofamzn
Unverified new user

Originally posted by LordRuss:
Originally posted by ghostofamzn:

You sir, are dumb. The labels and gaga made their standard money off this ($8.40 wholesale price sold to Amazon and Gaga taking .60-1.00 for her cut. Amazon is the only person who took a loss on this deal and they did it specifically to gain more customers and traffic to Amazon MP3.

EVERYBODY won on this deal. Indie distributors are mad because they cannot afford to take a 7.41 loss per cd sale like Amazon can.

OK, I'll stand corrected on the original delineation of funds. You're right, "to a point"; so prepare for your high colonic as you sir DO NOT know what you write entirely about.

Yes, Amazon lost out on 'physical' sales. Clerical errors happen like that and somebody is going to take a severe beating of sorts for it too.

Nobody made $8.40 per album. You are daft. Plain and simple. There was no check cut for that much. What class in Economics 101 did you fail to learn that in? Even if the Album went for that, that means the COST (once again "I" teach), COST PER ALBUM (which means "no one" MAKES anything) is $2.80 (1/3 the quoted price you stated = cost)... Your math is grossly failed.

So I will go ahead and bow out of your "dumb" comment from you and continue with obliterating your diatribe of the music industry economics lesson for my 30+ years real world lesson...

So, NOW that we know a real world wholesale price to retail stores of music cds are around $2.80 which is actually WRONG, wholesale is sold in units, wholesale to Amazon being global I'm guessing here was probably closer to $1.80 +/- .05. How else do you think Wally world can take a $20 CD one day & mark it down to $5 and sell it to you? Do you "think" their actually going to sell you something & NOT make any money... please.

Yes, folks won out on their purchases, and I celebrate with them.

But "you" know SHITE about royalties & how they are paid to recording artists. .60 to a $1 per album!?! I guffaw literally at you. This is Gaga's sophomore album with the label. She may have one more before her contract is up. AT BEST... PER ALBUM... MAYBE... liberal figure, best girl on the planet and Christmas morning, .17 cents per album. LESS if she had it written into her contract that she keeps the rights to all her songs and I doubt that she does. This IS industry standard!

Most bands get .07 per album... those being one hit wonders. Folks that labels figure will only get one really good album out of, at best, will get .12 per album and them try a second album that usually goes nowhere.

How do the labels 'know' when artists like Gaga (or anyone for that matter) come around? Unlike you Ghostofamzn, they don't look at the cloths, the makeup or the immediate dialog. They look at the whole picture and surmise the statistics. Not to mention, like me, they've been at it a really gyotdamn long time!

Lesson done...
Just cause you wrote a novel doesn't make anything you have said correct. What do you have, an associates degree in music (or some other bs major) from 30 years ago? LOL who cares.

Amazon paid the labels the wholesale price of $8.40 per album. This is fact. They then discounted the album to $.99, taking a $7.41 loss on each album they sold. This is also fact.

Where are you coming up with $2.80? Your math is flawed as is your argument, there is nothing in my statement or the OP that mentions anything like that.

I'll spell it out for you even simpler since i'm not sure you comprehend.

Amazon buys the albums from Universal for $8.40 wholesale price (this means Amazon pays the label, in money, $8.40 per unit) Still following?

Amazon then sells the album for $10 (usually) and makes a margin of $1.60 per unit. Still following?

In this case, they dropped the price to $.99 to bring traffic to Amazon MP3. Follow?

If they are buying at $8.40, and selling at $.99, they are taking a loss of $7.41 per unit sold. Surely you must still be following?

If she makes only $.12 per unit sold, i'll stand corrected, but I hardly think she gives a shit about album sales when her last tour netted her over 7 figures.

1813.6.2011 14:26

Both of you are so delusional they're going to have to put full faced padded masks on you two at the funny farm to keep you from 3rd degree burns from the window licking...

Do you even read the garbage you're writing? $8.40? and this quantifiable fact is from where? Left or right side of your colon? That is a made up charge, stated publicly so as to be claimed as the TOTAL LOSS for TAX PURPOSES. So "ghost", one without even a new education of a year, you should care...

patrick_ pull your head out of the tight fitting gromit you're stuck into... We're not talking about digital sales moron... physical CDs here... something you hold onto... hate me for the right reasons. Digital sales have "NO VALUE", they are of "theoretical value" only.

ghost... I haven't forgotten about you... "If they are buying at $8.40, and selling at $.99, they are taking a loss of $7.41 per unit sold. Surely you must still be following?" No shit!?! I think I can do simple math. I mentioned that early on. re-quoting me isn't helping your case.

Had you bothered to READ, NOBODY, that's a NO with a BODY attached to it. Alluding to the possibility that persons of a negative count... pay that kind of money up front per unit for a dying medium to be shipped across any country!!! Especially when any finger banging moron can have instant gratification by going down the street and have it for "X" amount of difference at another store. Wake up!!!

Don't sell us on your education, you're not.

As for Gaga giving a shit, I can't speak for her, I don't work for her. But having worked for 'some' bands in the past, they get pissed & hurt really quick and touring doesn't make it all go away. Album sales (when it all continues to go into the label's pocket) does nothing but remind the artist of that fact.

And for your information I have a PHD in life. I dare you to walk even a quarter of a mile in my shoes.

So... 1. Stand. 2. I am correct. It'll be hard to get tax records from these bastards to prove a point, but I might be able to find recording artists who'll back my claims. 3. I also have R&R swag, T-shirts, scars, DD2-14 & diplomas... what have you got? And I do care, just not for the labels.


1913.6.2011 14:37

Originally posted by LordRuss:
Do you "think" their actually going to sell you something & NOT make any money... please.

So in economics they didn't explain you the concept of clearing stock??

Originally posted by LordRuss:
We're not talking about digital sales moron...

So you didn't read the article, or your memory can't keep thing more than 3 seconds

Originally posted by LordRuss:
Digital sales have "NO VALUE", they are of "theoretical value" only.

once again, did you really study economics?? No value? Only theoretical value? I'm sorry but I rather teach economics to my dog, because he understands better than you do.

2013.6.2011 15:01
ghostofamzn
Unverified new user

Originally posted by LordRuss:
Both of you are so delusional they're going to have to put full faced padded masks on you two at the funny farm to keep you from 3rd degree burns from the window licking...

Do you even read the garbage you're writing? $8.40? and this quantifiable fact is from where? Left or right side of your colon? That is a made up charge, stated publicly so as to be claimed as the TOTAL LOSS for TAX PURPOSES. So "ghost", one without even a new education of a year, you should care...

patrick_ pull your head out of the tight fitting gromit you're stuck into... We're not talking about digital sales moron... physical CDs here... something you hold onto... hate me for the right reasons. Digital sales have "NO VALUE", they are of "theoretical value" only.

ghost... I haven't forgotten about you... "If they are buying at $8.40, and selling at $.99, they are taking a loss of $7.41 per unit sold. Surely you must still be following?" No shit!?! I think I can do simple math. I mentioned that early on. re-quoting me isn't helping your case.

Had you bothered to READ, NOBODY, that's a NO with a BODY attached to it. Alluding to the possibility that persons of a negative count... pay that kind of money up front per unit for a dying medium to be shipped across any country!!! Especially when any finger banging moron can have instant gratification by going down the street and have it for "X" amount of difference at another store. Wake up!!!

Don't sell us on your education, you're not.

As for Gaga giving a shit, I can't speak for her, I don't work for her. But having worked for 'some' bands in the past, they get pissed & hurt really quick and touring doesn't make it all go away. Album sales (when it all continues to go into the label's pocket) does nothing but remind the artist of that fact.

And for your information I have a PHD in life. I dare you to walk even a quarter of a mile in my shoes.

So... 1. Stand. 2. I am correct. It'll be hard to get tax records from these bastards to prove a point, but I might be able to find recording artists who'll back my claims. 3. I also have R&R swag, T-shirts, scars, DD2-14 & diplomas... what have you got? And I do care, just not for the labels.
Your University of Phoenix PhD means nothing to me, as your rudimentary understanding of even basic math and economics is sad.

AMAZON BOUGHT DIGITAL, NOT PHYSICAL CDS. Why does this simple fact seem to continually escape you. THEY BOUGHT DIGITAL ALBUMS AT $8.40 WHOLESALE PRICE.

Apologies to the mods for the CAPS parade but our resident jester "LordRuss" can't seem to understand even the most basic facts.

The original sourced article (THR) says Amazon sold 443,000 digital albums at 99 cents and took a loss of almost $3.3 million.

Let's throw some more simple math up there. 3.3 million-ish / 443,000 sold = $7.42, so I apologize, the actual wholesale price was $8.41, I missed a cent there.

if you care to continue with your window licking and continue to make yourself look like an idiot, by all means.

2113.6.2011 15:11

Oh patrick, or Dr. Dolittle (whichever) Amazon doesn't have a warehouse, so their little SNAFU screwed "distributers". So your 'clearing stock' idea was going to be a good argument, but sadly fell into Rover's water dish. Amazon set up the purchase plan for the "distributors" to buy the CDs & then distribute them. Then Amazon gets a cut. That's how this .Com thing works or did you think this works another way?

Moving on... Or am I moving to slow for you?

Theoretical Value... Your ego... It has no value to me. Some would say the same of your soul, thus it is theoretical. To sell me your soul would be of what value?

You replied to my cascade of valid retorts to your nonsensical points in reply to the forum, with nothing more than a nonsensical response other than to share a domicile with a quadruped with which you can carry an equally interesting conversation and then offer this as a lesson to me in Theoretical Value. A lesson in what prey tell?

Just stop now, before you embarrass yourself. You don't even need me for the job patrick. Let's not even go into spell check or proof reading or any other such nonsense of educational banter that hurts everybody's feelings.

This message has been edited since its posting. Latest edit was made on 13 Jun 2011 @ 15:13

2213.6.2011 15:44

Originally posted by LordRuss:
Oh patrick, or Dr. Dolittle (whichever) Amazon doesn't have a warehouse
I guess that is technically true; they don't have A warehouse; they have many warehouses...even ignoring the digital warehouses (AKA file servers).

Also, the value of a digital download is only theoretical before purchase. Once a purchase is made, it is no longer theoretical.

Obviously this isn't good for distributors, and I can certainly understand their anger. It isn't even about this one event tho...they are mad because they know that their business is outdated, and that it is only a matter of time before they are nothing but a footnote on a Wikipedia page about the history of music distribution. They really have little hope; some might start selling vinyl albums as decoration...others might start catering to extreme specialty markets. One of our local CD shops recently gutted more than half the store and turned it into a small venue for live performances...the front is full of music from local artists and shirts, stickers, etc...they are not getting rich, but they are not closing down either. Oh, and this did not affect them at all...Lady Gaga is not a local artist.


2313.6.2011 15:49

Originally posted by ghostofamzn:

AMAZON BOUGHT DIGITAL, NOT PHYSICAL CDS. Why does this simple fact seem to continually escape you. THEY BOUGHT DIGITAL ALBUMS AT $8.40 WHOLESALE PRICE.

Apologies to the mods for the CAPS parade but our resident jester "LordRuss" can't seem to understand even the most basic facts.

The original sourced article (THR) says Amazon sold 443,000 digital albums at 99 cents and took a loss of almost $3.3 million.

Let's throw some more simple math up there. 3.3 million-ish / 443,000 sold = $7.42, so I apologize, the actual wholesale price was $8.41, I missed a cent there.

if you care to continue with your window licking and continue to make yourself look like an idiot, by all means.
OK, I'll bow on the digital faux paux, somewhere in translation some wires got crossed and I got mixed between physical CDs and digital... But you aloofness can go up your ass about your one cent. Fuzzy math was used in hopes of simply moving the story forward. Massive amounts of information dictate time & this generation seem to lack the attention span. So your use of 'ish' seems to put you in my field. Is that up or down?

Phoenix was actually the school of hard knocks & your use of a thesaurus is exemplary, so let's move on...

I looked this up link and the only thing I can tell you (oh shit, I guess you'll just have to take my word) from experience, from my sources this statement was made for the public so the consequential sales would seem appropriate.

This is typical sales people. Nothing more. Store sales will suffer if on lines sale beat retail. Why do you think distributers are raising hell? But Noooo, LordRuss is an idiot & a dumbass, he don't know shit, he got his edumuhcation from Crisco... F*&$*& tards...

Amazon Lost very little. It is all Theoretical Value. No "real" money has changed hands at the moment. The retail Cds are going to take a beating though. Which may be immaterial for this particular forum.

So, NO. To take what was written in the article at THR or TWP as complete gospel is foolish and you were completely naive for doing so. Was I errant in part of fact? Yup.

Will I apologize? Who in here knows me?

2413.6.2011 16:10

Originally posted by KillerBug:
Originally posted by LordRuss:
Oh patrick, or Dr. Dolittle (whichever) Amazon doesn't have a warehouse
I guess that is technically true; they don't have A warehouse; they have many warehouses...even ignoring the digital warehouses (AKA file servers).

Also, the value of a digital download is only theoretical before purchase. Once a purchase is made, it is no longer theoretical.

Weeeeellll... yeah... now the theoretical starts to take on another argument. I mean, the music you download really doesn't get downloaded per se, the ones & zeros are duplicated to your HDD in the exact order. Once completed the computer then uses those ones and zeros to tell the computer that the mess is a song. So was it really a song or a mess of 1's & 0's?

Now the debate begins, or the debate has begun, but has it ended? Or did everybody get pissed off like they did with the egg and chicken debate and throw it into the back of the closet?

2513.6.2011 16:35

Quote:
Amazon Lost very little. It is all Theoretical Value. No "real" money has changed hands at the moment. The retail Cds are going to take a beating though. Which may be immaterial for this particular forum.
After this I'm done with the convo because clearly "Lord" Russ lives in a fantasy world where millions of "theoretical" dollars exchange hands and no one ever makes any money since stuff trades on rainbows and unicorns.

Amazon paid fucking $8.41 per digital album from Universal. This was paid to Universal in real dollars. Digital sales don't have "theoretical value." They have REAL value. Surely this is a concept your fancy PhD mind can handle. There is no "theoretical value" here, and your absolutely hilarious quoted text above shows that you have no idea how the world works.

Amazon doesn't get to just say "Hey Universal, I think that lady gaga album is worth $1.14, so that is all I am going to pay you for it." NO. Universal sets a price and Amazon, Apple, Spotify, whoever, pays that price.

ILL SPELL THIS OUT ONE MORE TIME. AMAZON PAID REAL MONEY TO UNIVERSAL. I have no idea what world you live in where a company can offer content and not pay for it.

One final point, the fact that you think "rudimentary" is a thesaurus word is laughable and really hurts your "story" of having a PhD. I'm starting to think your PhD is "theoretical"...

2613.6.2011 17:33

What about the "payola" aspect of all of this.
Gaga's album is practically free, causing the numbers for that album to be artificially inflated, much like in the old days when radio stations were paid to play certain songs to increase their sales.
It was shown to be illegal back then and this has many similar aspects.
Someone is subsidizing (paying) to get the album in as many hands as possible. This artificially inflates her numbers, causing it to rise to the top of the charts, whether it's worth it or not.

I don't see how the record company can be mad. Pretty cheap Payola (and apparently legal), if you ask me.


Oh, Im sorry... Did the middle of my sentence interrupt the beginning of yours?

2713.6.2011 17:43

@ThePastor I tip my hat you sir, which you help to prove my point to these young men.

I've been trying to state that the digital stuff has been inflated to reflect the retail stores, but I seem to be unsuccessful. If people knew the real cost of purchased music was these days the'd freak.

The music industry knows this & they're slowly losing hold with with their grasp & the gross greed over the last 25+ years. Call it a bad heroin addiction. Published $8.90 stories like the ones mentioned earlier only fuel the myth to keep people buying and the artists down.

Something is going to come to a boiling point, I'm just not exactly sure what.


2813.6.2011 18:26

Originally posted by ghostofamzn:

After this I'm done with the convo because clearly "Lord" Russ lives in a fantasy world where millions of "theoretical" dollars exchange hands and no one ever makes any money since stuff trades on rainbows and unicorns.

Amazon paid fucking $8.41 per digital album from Universal. This was paid to Universal in real dollars. Digital sales don't have "theoretical value." They have REAL value. Surely this is a concept your fancy PhD mind can handle. There is no "theoretical value" here, and your absolutely hilarious quoted text above shows that you have no idea how the world works.

Amazon doesn't get to just say "Hey Universal, I think that lady gaga album is worth $1.14, so that is all I am going to pay you for it." NO. Universal sets a price and Amazon, Apple, Spotify, whoever, pays that price.

ILL SPELL THIS OUT ONE MORE TIME. AMAZON PAID REAL MONEY TO UNIVERSAL. I have no idea what world you live in where a company can offer content and not pay for it.

One final point, the fact that you think "rudimentary" is a thesaurus word is laughable and really hurts your "story" of having a PhD. I'm starting to think your PhD is "theoretical"...
Uuuhm... I'm... glad(?) you can spell (although I'm beginning to wonder). This is good. Spinning my words to attempt a win is not going to get you a cookie or win you a spot on the 3rd grade debate team. However, "convo" isn't a word, so I'll have to retract my thesaurus comment and seeing as you have obviously NEVER worked in a a retail environment, there is a 90 day wait before payment until after the shipment of and retainment of goods received. Typical Business. Again, something you have never done. Oh, sorry is that "your" fantasy world I hear calling?

Oh, did I just read something about your little potty mouth about REAL dollars crossing desks? Uh, limbo lips, nobody walks into Universal City with three suit cases with a million each and goes, "Thanks Bitches, where's my hard drives?". To be as literal as you are taking me is equally licking the battery acid off the car and expecting to get high. The digital sales only became real AFTER the CONSUMERS became involved. Those rules "as you should know" don't apply to us as they do to the corporate players, but you seem to think we all play by the same rules, don't you.

And no, neanderthal of the kindergarten classroom reject, Amazon didn't set the purchase price of the album... they BID on the wholesale price, but the warlock in your magic kingdom didn't tell you about that little secret did he? Another little lesser known fact in the entertainment industry that the regular public doesn't know about.

So the money that is OWED Universal... yeah, it'll get paid. Rudimentary? Hey, dumbass! It Actually IS a word in the thesaurus! And I've already told/hinted/convinced everyone else that my PhD is theoretical, so take your head out of the crack pipe. I AM a professional, this IS a subject I have been doing & working in for years & still consult on. Other than small inconsistencies... do you really want to continue?

2913.6.2011 18:51

Originally posted by LordRuss:
Uuuhm... I'm... glad(?) you can spell (although I'm beginning to wonder). This is good. Spinning my words to attempt a win is not going to get you a cookie or win you a spot on the 3rd grade debate team. However, "convo" isn't a word, so I'll have to retract my thesaurus comment and seeing as you have obviously NEVER worked in a a retail environment, there is a 90 day wait before payment until after the shipment of and retainment of goods received. Typical Business. Again, something you have never done. Oh, sorry is that "your" fantasy world I hear calling?
You are a sad, strange little man. So let me get this straight, you are a has-been for some band that never made any money, so you moved on to "consult" for the music industry and then come to sites like afterdawn and spew nonsense about how "you know all the behind-the-scenes workings of the industry but I won't tell you." Please, get over yourself.

And as for never working in a retail environment, I am the OWNER and Managing Director of a commercial financing company, which specializes in factoring. So yeah, you are right, I know nothing about accounts receivable, not one bit. It's not "standard" 90 days, btw, but good try Russel.

As for convo, it's short for conversation. Surely you have never used a common slang term on the Internet oh mighty Lord Russ.
This message has been edited since its posting. Latest edit was made on 13 Jun 2011 @ 18:53

Lord Russ is old

3013.6.2011 20:07

Originally posted by ghostofamzn:


You are a sad, strange little man. So let me get this straight, you are a has-been for some band that never made any money, so you moved on to "consult" for the music industry and then come to sites like afterdawn and spew nonsense about how "you know all the behind-the-scenes workings of the industry but I won't tell you." Please, get over yourself.

And as for never working in a retail environment, I am the OWNER and Managing Director of a commercial financing company, which specializes in factoring. So yeah, you are right, I know nothing about accounts receivable, not one bit. It's not "standard" 90 days, btw, but good try Russel.

As for convo, it's short for conversation. Surely you have never used a common slang term on the Internet oh mighty Lord Russ.
Strait... if the two of us haven't scared off the rest of the rest of the readers... as it is beginning to again become questionable as to you having latched onto my background like a leech.

Has-been is relative, seeing as I'm not privy to whether anyone comes to you for knowledge on any subject whatsoever. I'm not a performer, again your assumption has made an ass of you, I won't allow it to be made of me. And if you'd bother to "read", I have been telling you and others (in the past); you are making it appear that wallowing in stupidity is your monicker.

Financing company... really? Must be doing really good to find time that you can finance frivolous expenditures such as this as pissing it away with me. The has-been. Nobody pays for anything upfront! You can't bullshit me. Put up a front for the other folks all you want. Throw the title out and impress the masses, anonymity makes heroes of everyone. 30 days at the least, 90 days at the most, typical business and you damn well know it. "Use someone else's money as long as you can until you have to use your own." The recession has everyone 'trying' for the 90 days.

Besides, so grand at finances and repartee that you use slang as "convo"? Sans you, not once have I heard it used in "this", AfterDawn; probably one of the largest technologically based, internet driven sites.

With the times, I'll admit it, but out of touch? I don't think so. You're not good at lying, so stop trying.

3114.6.2011 4:41

Doesn't matter how good a song or album is worth.people will buy it at the lowest price (or steal it).I have no doubt amazon paid for the music otherwise they'd be getting sued for stealing music and selling it.How much they paid or how the money changed hands is irrevalant.Sure they have a (private)contract with terms and conditions on how the money is gonna change hands (and other details).

I dont bother using a thesaurus i write my comments in plain easy to understand english. Occasionally i have had to use a website (www.dictionary.com) for complicated words that i have no knowledge of.A stupid person will remain stupid and try and con people into thinking otherwise.a smart person will look up anything they dont understand.


custom built gaming pc from early 2010,ps2 with 15 games all original,ps3 500gbs with 5 games all original,yamaha amp and 5.1channel surround sound speakers,46inch sony lcd smart tv.

3214.6.2011 9:14

Russ.. I will walk half a mile in your shoes.. because when I reach the end I will be half a mile away.. and I will have your shoes.. a win/win I think eh? unless you have foot fungus or some other nasty diseases..
;)

Retired professional musician view? .. record companies rip off artists.. they still think they are the ONLY distribution model and that they own every media outlet and artist, which unfortunately by fair or foul means they do.. they need to go and quickly.. people need to stop buying from them, even at 99c a pop for a physical cd through amazon.. they are still making money. Look at it like this.. ROYALTIES .. they get paid for airplay to the record companies (who own the publishing companies) so at 99c this will be a massive hit.. get loads of airplay as a result.. making vast sums for the record companies. The artist may still get their %% cut.. and it is a percentage of price (after tax deductions) not a fixed price per unit.. Gaga can afford it.. I don't see her going hungry in the near future.

This message has been edited since its posting. Latest edit was made on 14 Jun 2011 @ 9:21



ARR! Them pesky Navy! Get out of my sea!
irc://irc.villageirc.net/afterdawn http://www.pirateparty.org.uk/

3314.6.2011 10:23

Originally posted by ps355528:
Russ.. I will walk half a mile in your shoes.. because when I reach the end I will be half a mile away.. and I will have your shoes.. a win/win I think eh? unless you have foot fungus or some other nasty diseases..
;)
Yup!!! You win! And no, I don't think I have any foot funk...

Granted, Amazon will probably write the 'loss' (sarcasm) off as a tax exemption, distributers are raising hell because their double handling physical medium from retailers that could have made sales in store revenue due to digital sales & that whole mythology based revenue business model... well it's hard to get ones head around that. Not to mention our judicial system hasn't even caught up to regulating the ethical practice of such a monster. All the while an artist is still trying to eek out a living and practice their craft.

I've always known the leeches to maximize their cut & leave the artists in the breeze and they will forever continue to try. I believe this is echoed in your sentiments as well & I applaud your career in the industry as well as survive it as you could. Which makes it oh so frustrating to hear from pious folks that never worked in that environment that could obviously never understand.

Ho, hum, I suppose... Enjoy the shoes...!

3414.6.2011 10:25
KK
Unverified new user

Originally posted by LordRuss:
Originally posted by ghostofamzn:


Nobody made $8.40 per album. You are daft. Plain and simple. There was no check cut for that much. What class in Economics 101 did you fail to learn that in? Even if the Album went for that, that means the COST (once again "I" teach), COST PER ALBUM (which means "no one" MAKES anything) is $2.80 (1/3 the quoted price you stated = cost)... Your math is grossly failed.

Lesson done...
Not sure how amazon did this promo, but it's entirely possible that Lady Gaga DID make her royalty based on the original, non-sale price. I know for a fact that when Amazon marks books down to .99 for promotional purposes, the author gets royalties based on the original price. I have royalty statements to prove this. So it would follow that they might have done a similar thing with this album. It all depends on how things were set up, and actually has nothing to do with "industry standard" because it's a one-off promotion.

3514.6.2011 11:10

@KK

I tried to tell ghost but he wouldn't have any of it. The posted price of the wholesale purchase in the news was for our entertainment as well as a public service announcement to the IRS. Royalties and percentages paid to artists based on the sales of albums & books & movies (stuff like that) don't work exactly like we would think they do.

1, they don't get paid in relation to the Gross sales. It's based on the Net Sales & 2, their take is actually also based on the wholesale price of the purchase, not the retail. Most folks don't know that either. This bums a lot of people out.

A popular unit of measure labels like to give artists is called "points". Which is basically a percent of a percent, if you will. So if you sign for a record deal and they give you, say, 12 points on the first album (all points are different & they change like underwear) it's actually 'like' saying you get .000012% of the NET of the album sales of the first 90/180 days. After that 90/180 days the contract may change and the points will change as well. Actually, it does change, the percentage goes down.

These guys don't play fair, they don't have your best interests in mind and they'll do whatever it takes to make them money, not you. Music is fickle so it has to sell fast, thus turn around is key. Books take time, so a longer period between cutting payment is due there. Movies have a whole different venue because of formats and bonus features & higher egos to deal with.

But 'similar' royalty obligations are still in play when it comes to selling the finished compilation (movie, book, cd). The studios, labels & publishers have to deal with another royalty payment if they use the artist in another format other than the medium we've became accustom to purchasing & they'll fight paying them with every fiber of their being that they can muster.

Digital sales being such a new phenomenon I can't tell you 100% how this now equates into the artists getting their royalties. If you still got your payments despite a similar Amazon blitz I would have to say that in one hand it proves my point about how record labels bloat the hell out of their sales.

TWSJ reported that Amazon went and put Gaga's album up again for .99 for those that missed the SNAFU and apparently made another killing her a few days ago; and to what ends if this supposedly was going to hurt so many businesses?

Somethings up folks, somebody has vomited in the petunias!


3615.6.2011 3:59


Most bands get .07 per album... those being one hit wonders. Folks that labels figure will only get one really good album out of, at best, will get .12 per album and them try a second album that usually goes nowhere.

Where did you get these numbers from, LordRuss?
Royalties are divided up between songwriters and performers. Performers sometimes 'sign away' a percentage of their royalty payment in return for an advance from the record company. As soon as the record company have recouped the amount advanced to the artist, and the 'loan' has been repaid - the artist goes on to collect the full royalty on the remainder of the sales of the record. The artist continues to do so until they die, and in fact, the artist's family continues to receive the royalty payment on every sale for, I believe, seventy years after the death of the last artist credited on the record. At the moment, the statutory royalty rate on a standard (less than 7 minute) popsong is in the region of eight cents per song.
Songwriters too, get about eight cents per song - this songwriting royalty is administered directly between the songwriter and their royalties collection agency - the record label is not involved, and cannot make advances to an artist based on the potential revenue from that copyright. It also continues being paid to the beneficiaries of the songwriters long after their death, and it also pays out around eight cents per song.

If GaGa is credited as songwriter of the songs on the album - she is due eight cents, per song, per album sold. If she shared that songwriting with someone else, she'll have to split that eight cents per song with the other writers on the tracks in question. If there are ten songs on the album, we're already looking at eighty cents of songwriter royalties to be paid on each album sold, more if there are more than ten songs.

Then there are the performer royalties. Again, eight cents per song to be paid to the performers credited. Another eighty cents (if the album is ten songs long, more if there are more tracks). At this point, Amazon are already legally obliged to pay out more than they receive for each album sale. Also, at this point, the Interscope have not received any recompense for the effort that they have put into GaGa's career and record. They may be taking a cut of GaGa's performance rights, but they've already given her an advance on that, and presumably a very large one - she has/had a lot of bargaining power (less now, as her sales have been appaling compared to the promotional investment of the last couple of years).
We do all like to imagine that record labels are evil and stand in the way of great music, and rip everyone off in the process except themselves. I won't defend them - they play hardball in business and any artist who doesn't play equally hard with them will suffer financial consequences. But the copyright system on music royalties exists to protect artists, and does so. There is no legal way in the world that Lady GaGa can receive only 17 cents per album. There are probably ways that she can receive only that amount into her bank account per sale because she's diverted a lot of her royalty income into other services and investments - many of them offered by her record label, but that would be the same as me claiming my salary was lower than it is because y credit card and mortgage payments are deducted automatically each month.
GaGa isn't an artist whose work I admire particularly, although it's impossible not to respect her commitment to her business/act. That said, we tend to look upon the artists as the angels and the labels as the demons. Is it really so clear cut as that though? GaGa's songs are not works of intense erudition or skill. They're great pop, that's obvious, but she hasn't put a lifetime of training and study into her craft like Bach or Beethoven. Yet her hours of work on 'Telephone', however many hours they were, will continue to pay out to her survivors long after her death. The hours of studio engineering, mastering, mixing, promotion, advertising, administration, radio plugging, tour booking, set design, costume design, make-up, legal negotiation, synchronisation licensing, retailing, marketing, distribution, etc etc etc put in by a legion of other workers who are absolutely CRITICAL to her success, will not continue to be paid for that period. In fact, many of those support workers will not be paid anything by GaGa ever again, much less receive a thank-you card. Record companies can be evil as hell, I'll agree. But do 'artists' like GaGa really deserve so much more for their hour's work as all the other people who help them along?

3715.6.2011 3:59

@LordRuss
Ah, your last post clears things up a little. You're talking about percentage points on albums negotiated between record labels and artists.
These payments are negotiated on a case-by-case basis, and are in addition to the Compulsory Statutory Payment royalty.

As I'm sure you are aware, there is another eight cents (or thereabouts) paid to the artist(s) for every track sold, and the same again to the songwriter(s).

These payments also apply whether the song is sold via physical or digital media, whether on a compilation, album or single.

This message has been edited since its posting. Latest edit was made on 15 Jun 2011 @ 4:18

3815.6.2011 13:30

@jjkeops You're right, all the songwriters get payed as well and their contracts are written up as well, but with different lawyers and different rules of engagement.

Those are copyright laws and aren't covered under the same as performance laws, which are covered under another set of creative laws; you see how 'normal' folks can get confused... so take artistic folks that just want others to enjoy their art (not to mention they want to "eat" in this life time) and they'll sign anything just to get their stuff out there. This is a simple fact it gets them taken advantage of most every time.

I know it's hard to believe, but it really is a harsh fact to the industry and 100% legal; those damned contract. "Get it in writing", they say out there. You sign, the Label dines. There are loop holes & some bands that save their money and don't smoke or shoot it up into their veins use that money to sue for their property back. Your smart enough to know about what happens to the others that choose to do otherwise.

Facts are, the Entertainment Industry (like the military) has been at this a LONG time. They know what their doing & have screwed over artists & the public with the precision of a surgeon for a long time. Having been both an artist & in the military I should be completely schizophrenic; seeing as the only contract I signed was with the military... and yes they both will take advantage of you.

Gaga "may" have had some tech savvy people on her side for this "turn in the tide" change in technology as the industry has yet to figure out their role in screwing the artist yet. Artists willing to listen to IT artists and economic advisers (not trying to screw them either) may have a chance for once before the labels and Hollywood get in too deep. Although, Hollywood may already be in there and too late for us anyway.

What's going to be interesting is how royalties are going to be paid once albums & publishing come out of circulation for a while and then go to post distribution firms. Their doing some of it now & I'm having trouble finding information how their sending out those royalties.

Already I'm hearing cases going into courts of royalties not being paid for such infractions NOT being honored. Because when publishing rights were originally drawn, digital publishing wasn't even heard of at the time... soooo.... Once again 'labels' are making something, the families of the deceased or the original artist are getting nothing... the defamation continues.


3915.6.2011 17:22

Originally posted by LordRuss:
@KK

I tried to tell ghost but he wouldn't have any of it. The posted price of the wholesale purchase in the news was for our entertainment as well as a public service announcement to the IRS. Royalties and percentages paid to artists based on the sales of albums & books & movies (stuff like that) don't work exactly like we would think they do.
Hey Russ to be honest I didn't read most of the argument between you and the newbie so maybe this is already been stated, but it seems to me you are implying that Universal is practically giving the album away and that Amazon is writing off a phantom loss at the expense of the taxpayers? I don't buy it, sorry.

I don't see why Amazon would have paid any less than the stated $8.40 wholesale price? Amazon and other retailers are allowed to price items at whatever they want after they purchase it (except for Apple and Jordan products which have "floors"). Being a former artist/consultant, you of all people know the record labels are not in the business of giving away anything.



4015.6.2011 18:49

No, that's what got misinterpreted. It's a very torrid game that gets played in this business to begin with. Amazon & other companies at this point bid for first dibs to blast out download rights of custom pricing. Universal posted on all the news papers the price we were arguing about. Amazon didn't "pay" anything; that was money owed to be paid much later.

Movie theaters do a similar thing as well. What they do is compete with other theaters to play a summer hit in their theater first. Facts are, no theater really makes any money getting butts into the seats, it's at the concession stand. Well, Amazon was only supposed to make a very little something off the album sales as well here & I'm not disputing that. I also took my bite for miss reading the digital to physical cd faux paux as well, but apparently that wasn't good enough either.

Anyway, because initial production costs are exorbitant, (god I know) doing a run off of only a couple thousand would be foolish, thus making somebody purchase something upfront for $9 sounds feasible, which the newbie would rightfully understand and argue with me till Sunday, because it 'feels' right, but we're also talking about digital sale too... 'nothing physical'; i.e., no manufacturing.

But it doesn't change what's right... Labels saturate the market and makes runs of 500K because the cost doesn't isn't really any more than the start up. Start up is about (for a book, just print, paperback) might be $12/15,000, no distribution, 2 color cover, you pick it up. And that's with my guy here where I'm at & I know the guy & only about 10,000 copies. But to add more copies would only be a few more bucks after that. I really mean, only a few buck, like $40 PER 100 kind of bucks.

And it changes drastically from there dependent on the size printer you have from there. The larger scale printer, the bigger the bulk, the larger and faster the turn around and cheaper you get your merchandise out. Economics at its finest. Again, he didn't want to hear it.

I didn't want to hear it when I was an artist in Chicago either and that city chewed my ass to pieces; but I'm stronger now for it. And you're right, I didn't give my stuff away, my boss gave it away.

They're slick, just like drug dealers. They'll give just enough of it away to get you hooked and then hit you with a load & bleed you dry & move on to the next guy. It really can be horrible.


4115.6.2011 18:55

Quick lesson & I'll leave it alone...

Movie theater "A" wants the Smurfs... So does "B"

"A" says they will pay 75% of their gate receipts to play the movie first over "B"...

B says they'll pay 80% and so on as the bidding continues till Sony Pictures Distribution gets one or the other to say 100% first at "X" number of screen for 'x' number of weekends.

That's what the bidding war I was trying to imply and the pissing contest was about. I just didn't want to write another novel...

Now I'm an asshole again...

This message has been edited since its posting. Latest edit was made on 15 Jun 2011 @ 18:56

4215.6.2011 21:36

Seems to me everybody is confused over everything at this point and nitpicking over choice words. Thanks for clearing it up abit.


4315.6.2011 22:08

I tried, but there will always be something new to gum up the works...


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