An online music store update

[SteveDallas]

http://www.wired.com/news/digiwood/0,1412,62995,00.html

Oops.

My question is, if you can sell something that's popular and people are dying to have at a higher price point, why can't you sell something that's NOT popular and not moving well at a LOWER price point?

[russotto]

Because record companies are no longer only about profit. They're about how much profit you can make WHILE ABUSING BOTH CUSTOMERS AND TALENT. To a record company exec, making a profit by selling a popular product at a popular price is somehow cheating.

[richlevy]

All five major music companies are discussing ways to boost the price of single-song downloads on hot releases -- to anywhere from $1.25 to as much as $2.49. It isn't clear how or when such a price hike would take place, and it could still be months away. Sales of such singles -- prices have remained at 99 cents -- still account for the majority of online music sales.

Of course if they are discussing this together, they are going to jail!!!

If I didn't think I'd end up murdered in my sleep, I'd set up an indy download site at 25 cents per song. Since the artist only sees 10-25 cents per album, I should have no problem signing up bands.

[Undertoad]

I'm expecting to debut that exact project in a few weeks, at $0.79 a song to begin, with about 150 bands and about 2500 songs. (The exact price point is up in the air last I heard)

[Nothing But Net]

If it goes that expensive, I'll just hum the music

[Undertoad]

You can do that, but make sure what you hum is licensed, and don't hum for the entertainment of others.

[jaguar]

If I didn't think I'd end up murdered in my sleep, I'd set up an indy download site at 25 cents per song. Since the artist only sees 10-25 cents per album, I should have no problem signing up bands.

I am convinced, sooner or later Apple is going to do this one way or another. I'm not sure how they're going to avoid the mp3.com syndrome of piles and piles of utter shit but it will be done and it will happen. Smaller labels, then garageband, it's a matter of time.

For now I prefer to by the miniscule amount (2-4 albums a month) of strictly independant music I do buy on CD, I would like the convenience of Apple's iTunes store (I use a powerbook and an iPod) it's not in europe yet so it's not even an option. I seriously doubt any of what I buy will be on there anyway. Kinda like CDs anyway. I can re-rip them to higher and higher quality lossy formats till storage gets to the point I just just FLAC or raw WAV anyway and the cover art is cool.

[SteveDallas]

Yeah, it'll be interesting to see how that plays out. But I'm also interested in the older stuff: the back catalog. All the big labels have tons of old recordings sitting in their archives. This stuff has already been produced, bought, and paid for. If it's in release now on CD, it's generally as bargain CDs. (Example: George Szell conducting the Cleveland Orchestra in the Beethoven Symphonies. These recordings were originally made about 40 years ago for CBS; they are now owned by Sony Classics and sell for $7 per disc. Obviously these are aimed at people who want a cheap recording of Beethoven.)

From where I sit, these recordings ought to be gold mines for the labels. It seems to me (somebody correct me) that taking the CD masters and making digital files out of them would cost very little, and then boom, you have stuff ready for resale at your favorite music store. At such a low production cost (no CD, no box, no liner, no shipping), wouldn't it take only a very low level of sales to break even on such titles? Wouldn't almost any sales be money they would not otherwise have made?

Or, try this one out. How about you make them available for sale, but you don't bother digitizing them. Until somebody actually tries to buy it. Then, if you're really afraid you're going to put labor (highly paid labor I'm sure ) into digitizing the stuff that you'll never break even on, then you don't have to. Sure, there would be logistical challenges (that first person who bought wouldn't get an immediate download would they?),

[smoothmoniker]

Here’s the problem with releasing back catalogs:

When they first recorded the material, they signed contracts with the performers, the writers, the producers, everybody. Those contracts contain very specific information about how the recordings would be distributed, and everyone gets paid based on the final format. For example, someone performing on a soundtrack for a movie is paid a different base rate than someone performing for a video game or a CD.

Starting in the mid-60’s, they started realizing that recording were outliving the technology of the present time, and they put in “future exploitation” clauses that allow the owners of the recording to release the recording in future as-yet-undeveloped formats, provided they make additional payments to everyone involved. By the mid to late 70’s these clauses were fairly universal.

So now, if a label wants to release something prior to the “future exploitation” clause, they have to go find EVERYONE involved in the original recording, and secure their permission, and pay their new royalty rate. If they want to release something that is under an FE clause, they don’t have to find everyone, but they do have to go back and repay everyone their new royalty rate for using the recording in a new format.

For some songs the new royalty payments make it prohibitively expensive to release the material online. For some, it’s impossible because they can’t track down the 200 people involved in making the record.

-sm

[SteveDallas]

I imagined there were issues like that, but I also imagined they were more surmountable than you describe. Musicians, yes, but I assumed other folks would generally be on a "for hire" basis. I suppose it depends a lot on the contract.

Is there generally a term on these contracts? Are they assignable to heirs? (I imagine at least half the musicians on that George Szell album I pulled out as an example are dead. For that matter at the time there must have been an expectation that the recordings would lapse into the public domain at some point... though obviously that doesn't look very likely now.)

This, by the way, is the biggest reason there are almost no new recordings by American symphony orchestras. The labels are unwilling to pay the musicians what the musicians (almost all unionized) demand.

[smoothmoniker]

Originally posted by SteveDallas
... The labels are unwilling to pay the musicians what the musicians (almost all unionized) .

... are worth. It takes more expertise, time, talent, and training to become an orchestral musician than to become a neurosurgeon.

And it takes 90 of them in the same room to make an orchestral recording.

Beyond that, most of the work is done “for-hire”, but with what’s called a “special payments” clause, which means that in certain circumstances, the for-hire work is eligible for royalty payments. Going platinum is one such circumstance, re-issue in a new format is another.

-sm

[Beestie]

...but they do have to go back and repay everyone

Yeah, they'll pay everyone allright... just as soooooooooooooooooooon as the sales of the new release (old release on the new media) meets the ever-bouyant, indexed for hyper-inflation sales floor.

Once the sales floor is met, the record company agrees to pay the artist .03% of that portion of net sales that exceeds 80% of the bottom 20 CDs in the Billboard Top 100 after adjusting out a pro-rata share of marketing and advertising expenses, capital expenditures, admin salaries and filesharing subpeana costs and costs of the lifetime annuity contract for the author of the DMCA.

[smoothmoniker]

Sorry. Not me.

I'm not the artist - I'm the guy who showed up at the studio to drop a keyboard track on the record. And my union has kick ass lawyers. I don't get paid based on profit, and there's no payback clause. The very first mp3 that sells from iTunes, I get a reuse fee for my session. And if it hits 100,000 sales, I get paid again. And when it hits 500,000 i get paid again. And every half-million sales after that.

And if they decide to use it in a movie, I go buy a new car.

-sm

[Beestie]

I heard Frank Marino complaining about that. His live album from the mid 70s is still selling and he hasn't seen a check in ages.

And we were talking about resurrecting old material in an unforseen format - the example you provided spoke to current material in an existing format.

I was being sarcastic anyway but I sure hope that a movie picks up your tunage. What current or recent movie would your music fit best in - just so I have an idea?

[SteveDallas]

Originally posted by smoothmoniker


... are worth. It takes more expertise, time, talent, and training to become an orchestral musician than to become a neurosurgeon.

And it takes 90 of them in the same room to make an orchestral recording.

I'm not saying you're wrong. I'm an amateur clarinetist and my wife is a violinist and conductor who's a member of the local AFM chapter. I am absolutely not on the record companies' side.

But the fact is what the current situation has produced is NO recordings of the orchestras.

I can't believe this is good for the labels, and I can't believe this is good for the orchestras, or for the individual musicians.

To take an example, obviously I pay attention to the clarinet playing when I listen to a piece of music. I can go down to my living room and pick up recordings of orchestral music with clarinetists such as Stanley Drucker, Larry Combs, Robert Marcellus, and Anthony Gigliotti. Unless some drastic changes happen, I will never have a recording of Ricardo Morales (the current principal clarinetist of the Philadelphia orchestra) playing in Rimsky-Korsakov's Capriccio Espagnol or Tchaikovsky's 4th symphony.

I'm not saying the musicians should do the recordings for free or sign away all their rights. (I personally think the smart thing to do is for the orchestras themselves to produce recordings, and a couple are starting to try.) But I guarantee that at least some of them will live to regret that they have left no recorded legacy of their careers.

So what is the union doing about it, I wonder?