Music Revenue: My Share

I have been waxing lyrical at the BBC about the amount musicians and composers don’t make and the amount record companies still take, even in this age of digital downloads devoid of packaging.

In fact I wrote more, most of it expertly snaffled (for political reasons) from the MCPS-PRS Alliance magazine, M. I particularly like David Stopps article – I’d like to get to know him, though I am not yet sure quite how well… <--- obscure Howard Jones reference

Here’s the full text of my BBC comment:

The creators of the music upon which this industry is based are very poorly treated with regard to revenue share, and it is getting worse.

The advent of digital downloads presents an opportunity to redress this erosion of revenue for the creators of music, but in fact, the largest, Apple with an 80%+ share of the market, have maintained the inequity on behalf of the record companies.

Apple’s iTunes site was forced to remove the claim that it was ‘fairer to artists’ from its website.

There is a history to this steady reduction in payment to the actual originators of the music which the entire industry relies upon. When the CD was introduced, the record companies decided that it was a new technology and that packaging deductions should increase to 25% of Published Price to dealer and that the artist’s royalty rate should be cut to 75% of that for vinyl and cassettes. After all, record companies had to pay development and introductions costs. 20 years later most contracts ensure that these rates are still in place – and yet, digital dowloads do not have packaging!

Writers/performers only get 9% of CD sales and currently receive even less from downloads, typically around 8%. Record company share of download revenue increases to 68% as opposed to 46% share of revenue from a CD.

Future royalty earnings will HALVE if action being taken at the UK Copyright Tribunal by the British Phonographic Industry and a consortium of Digital Service Providers and Mobile Network Operators is successful. They propose further reducing the amount the creator receives to 4% or less. In real terms, this delivers only 2-3p per download in contrast to for e.g. the credit card company which gets average 6-7p per download, or 9%.

What share of revenue do the panel think the creators of music should receive?

Some reading for you:
MCPS-PRS v BPI
David Stopps on music revenue

And finally, here’s Richard Thompson on songwriting from a nice interview in the Musician’s Union mag. I found myself going mmm… yes… indeed…

Richard Thompson

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