Radiohead: Artists often screwed by digital downloads

By Nate Anderson | Published: January 02, 2008 - 03:35PM CT

You might think, if you didn't work in the music business, that famous artists stand to make mad cash from popular albums on iTunes and other digital storefronts. Sadly, that's not the case, and Radiohead frontman Thom Yorke has spent the last week calling out the labels for it. He recently told BBC Radio 4 that "the big infrastructure of the music business has not addressed the way artists communicate directly with their fans. In fact, they seem to basically get in the way. Not only do they get in the way, but they take all the cash."
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Yorke said the same thing in a widely-quoted recent interview with David Byrne. His advice to young artists in that piece was, "Don't sign a huge record contract that strips you of all your digital rights, so that when you do sell something on iTunes you get absolutely zero. That would be the first priority." He went on to say that selling the new album, In Rainbows, directly to fans made the band more money from digital distribution than "all the other Radiohead albums put together, forever."

It's a common complaint from artists. "Weird Al" Yankovic noted on his web site last year that "I actually do get significantly more money from CD sales, as opposed to downloads," though he seemed a bit puzzled about why this was the case. "This is the one thing about my renegotiated record contract that never made much sense to me. It costs the label NOTHING for somebody to download an album (no manufacturing costs, shipping, or really any overhead of any kind) and yet the artist (me) winds up making less from it. Go figure."

The labels do "go figure," of course, and they've spent decades coming up with figures that lower artists' royalty percentages. (If you want to get a general sense of how this works with physical distribution, the Future of Music Coalition has a nice explanation of many standard contract features and how they affect artists.)

Digital downloads should make many of the standard industry deductions irrelevant (such as breakage and production costs), but the whole issue is complicated by the fact that many contracts didn't included any provisions for digital download sales when they were signed. Radiohead's Yorke complained in the Wired article that "EMI wasn't giving us any money for digital sales. All the contracts signed in a certain era have none of that stuff." Artists today are savvier about the need to protect their download royalties, but the rate of return is still quite low.

Such contractual agreements have taken on a special importance this holiday season as major-label CD sales tanked by 20 percent from the same time period in 2006. Such a sudden collapse may be indicative of a real tipping point to digital, and it means that artists who sign with record labels need to pay special attention to their downloadable royalties.

Services like TuneCore and CD Baby now make it possible to get music up on iTunes and other services for low fees, and artists can maintain all their rights. The deals don't cover marketing or recording costs, of course, but with computer equipment and home studios driving the cost of recording into the ground, more bands could find that it makes little sense these days to aspire to a major-label contract.

Of course, if you're Radiohead, the built-in publicity makes a direct-to-fans model much easier than if you're, say, the "Free As In Beer" out of Dayton, Ohio.

So how many copies did Yorke & Co. move with their experiment? Yorke isn't telling, though he does dismiss as absurd the 1.2 million album guesstimate that has been floating around. And the band knows that it can't stay all-digital yet; a CD release of In Rainbows is planned as well. (Update: the disc came out on January 1 in the US.)

and for anyone who missed it:

http://www.youtube.com/wa...kythkK4EPQ

So this is why the beatles have resisted digital...

That is the reason most artist should be resistant. Unless you can cut a good deal. Artist are getting nothing for downloads.

MikeMatronik said:

laurarichardson said:

Well some are. But we are talking about artist who are connected with independent labels or do it in a "freelancer" fashion. Björk is now selling drm free music at her website. Sananda Maitreya (Terence Trent D'arby) has been doing so since 4/5 years.

Independent artists, or go digital, or go vinyl.

Dude, this reminds me the shit that Trent Reznor had to surpass to put the NIN remix website online

yeah

good on ya Thom Yorke!

fuck these labels!

fuckers, don't even release all the old music at all on any format,
and then leech out the artists from downloads.

Fuck em i say.

Then again, it doesn't matter to me.

I haven't paid for a song or album in over 6 years.

Torrents and P2P are great! As are Soundtrack forums, where people share for free!!

fuck these labels, they can suck my 50 inch cock and eat my cum while i listen to free fucking music.

sons of whores!!

dirtyman2005 said:

50 inch...damm that's small!

but if their contracts say nothing about digital music then why does the
company automatically get to release them online and take the money from
them?

if there is no mention of digital sales can't the artist just open their
own sites and offer them for sale, or at least stop deny the labels the
rights to publish them?

isn't that what prince is doing? it seems he's not allowed to sell the
old music online, thus we get occasional streaming files (not for sale)
in reflection room etc etc.

but his back catalogue isn't for sale on itunes or such, is it? i don't
know actually, since i don't know how itunes works, lol.

it just seems a very unfair environment where a new medium pops up that
isn't in the contracts and automatically the labels get the upper hand
again and just sell the music through it without paying the artist at
all anymore



is it really that bad?

This is the same thing the tv writers were bitching about. The difference is they had a point.

Artists have never made much if anything off records unless they're Prince or Stevie or Patrice. Their food has always been the road. That hasn't changed despite all the claims of the industry "transforming."

The only people that have a problem with this are suits and wack artists. The downloads prevent them from fully promoting or completely being a package. That public identity is lost in downloads for a number of reasons, and those poor twats have a harder time creating a brand as a result. Boo hoo.

Real dudes like Radiohead don't have to worry, but as we can see some fool has managed to convince them they're missing out on millions from downloads. Please.

This is exactly what the writers strike is about, and sorry to say, artists are exactly right. They are getting ripped off, kind of a combo of the label and steve jobs. Heres how it works, if an artist signed their deal before digital downloads, they are really screwed because it doesnt state anything in there about digital downloads, it states cd or album sales, not a word about digital since it didnt exist. So some artists had to go back in and renegotiate to get "digital" into their contract, but of course their rate of pay is way lower than their album deal. Which is what the writers strike is about, they want pay for the dvd releases of "their shows" and the stuff that is played on YouTube that networks allow for use, and all that stuff isnt in their contract and the producers dont want it to be, which is why that strike might go on forever. I didnt really think about this much till last night when Letterman came back, and Robin Williams was a guest and Robin jokingly, but serious, mentioned "And Steve Jobs doesnt make money", the reason for that is that everyone is talking about the industry being down way don, and yet a few are reaping "rewards", iTunes is one of the things in the "writers" demands since all the shows that are allowed to be downloaded from them for a fee, the writers get nothing from it, because this form of media did not exist. Which is basically like saying if James Brown had a contract and it stated sales of "Vinyl Albums" since CDs werent invented yet, then along come CDs and James not be given a cut of those sales or LESS of a cut, because it wasnt in his original deal, sorry but anyone who thinks thats right is just in-human.

Like I already said many many many times before, Steve Jobs=Evil

He's killing artists

Artists have no reason to switch to digital

this is a lose-lose situation

Nobody makes money off of digital albums anyway because Apple controls the entire market...

krayzie said:

wait a minute, why is this an issue with Jobs? It's the labels that are dictating how much of the pie the artist gets...not Jobs.

sosgemini said:

Actually its an issue with him because he is getting a cut of the money, a big cut. TV shows given to iTunes for downloads net mr.jobs more money than the damn actors and writers combined in this system. As far as music its pretty much the same thing, part of the reason that artists are getting less on digital than cd is because of his cut that he is taking, which is all fine and good since its his system, but if you add his cut and the labels cut, the artist is lucky if they get a nickel on a download.

how much of a cut is he receiving? and im not talking dollar wise but percentage wise.

sosgemini said:

There is no clear percentage given in any article about him, but it is that of a label, which at the end of the day, if you are an artist and now you have two big sharks taking your money. On top of that the breaking up of albums and selling every track for 99 cents has made the artist non existent at this point. I heard an artist bragging the other day about 250,000 downloads of their single, i mean do they release at 99 cents a pop, a label, apple iTunes fees, they probably will be getting about 1% of that if they are lucky. Which is why you will see competitors to iTunes become more visible, and also if the Producers give in to the writers strike which they had better or tv and cable could lose everything, you will for sure see downloading and dvd prices go up and of course they will blame it on the writers.

lastdecember said:

are you assuming that Apple operates as a label or do you know this as a fact? If so, please expand.

and...

isn't the artist and labels choosing which songs must be purchased with the entire album or sold alone?

sosgemini said:

This is what i heard from Metallica speaking on Apple and also a few others have echoed their words, like Alanis Morrissette and Don Henley. They mainly have said that Apple has been let in and is acting as another label to negotiate with over their contracts, according to Metallica their stuff could have been turned over to iTunes without their knowledge if they didnt have a deal that actually gave them some more control than say a new band just signed. It really depends on who you are and what your deal states, im sure some artists can stop the selling of each track seperately but im sure the number of artists that can do that and actaully stop it can be counted on both hands if that many. There are many older artists that have the pull and some dont, The Beatles obviously would be one that has pull since they are still fighting it, and negotiating it, but im sure one of the issues is the breaking up of their albums.

.
[Edited 1/3/08 11:44am]

lastdecember said:

The prevailing thought is that Apple collects 10 to 20 cents per download, which is reasonable to me. Apple was the company that went out on a limb, got all the record companies to agree, and piloted paid digital downloads back in '03. The labels aren't sharing the lion's share of the profits with their artists like they should.

AlexdeParis said:

Well its still a big portion when you think of it, because its an addition to an already lopsided system. When music retailers existed, they werent getting a cut like that which is why they all basically have folded, the ones that remain like Best Buy and Walmart make nothing on their music as a matter of fact they lose about an average of 2-3 dollars per cd, iTunes could not maintain itself if it lost that much, which is why you lost "true" music retailers like Tower or Sam Goody, because they couldnt make anything on the music, and had no other product to sell you, if you go to Best Buy or Walmart , Music is the last thing on their mind. So if iTunes had to lower its cut it wouldnt exist, which is why alot of artists have not given their stuff to iTunes because its having someone else take a cut, and true labels are taking the lionshare, but this is another added thing, had this philosphy been allowed then you would still have music retailers. Interesting enough jobs was qouted as saying earlier this year "that though iPods have saturated the market, only 2% of whats on them is from iTunes".

lastdecember said:

what's the cost to print and ship cds? with itunes you don't have any of those costs...

sorry folks, i don't see Jobs & Apples as the bad guy here...

lastdecember said:

But it still boils down to the labels. When Amazon or Wal-Mart sells the same song Apple does for 10 cents less, you can best believe the labels aren't the ones getting 10 cents less. They're trying to undercut Apple to help build their business. Unlike Best Buy and Wal-Mart retail, they've been unsuccessful so far because they haven't been able to match Apple's ease of use (among other things).

Furthermore, Apple has fought hard to keep the prevent the labels from charging more per track than 99 cents. The labels want more, but they aren't even giving most artists what they should now. Do you think they'd kick more of that down to the artists? I sincerely doubt it.

AlexdeParis said:

Its still a combo of things though, neither will retreat and in the end the ones making the music will get less and less. Its all a domino effect at this point and each little thing leads to a bigger thing, i doubt either will kick anything to the artist and in the end without them both are non existent and meaningless. But like Chuck D said "music retail" is dead at this point but the industry is thriving, and thats what people are missing, labels are going to always exist because at this point they arent pushing music, they are pushing events, they are nothing more than media giants, music is a back seat at this point to a label, the connection between all these things is so amazing, at this point you have about 2-3 major labels, you have only one source for all the media that is put out there over the airwaves, clear channel, and then you have one source controlling the visual side which is viacom, and they all are getting loaded, despite this "fantasy" about sales being down, and now you have new forms coming in iTunes and Youtube that labels/networks are also using to get stuff out there at a cheaper cost, but at the same time those new things are also taking cuts of whats available, the reason for these "cheaper" avenues is to make it more appealing to the consumer, which at the end of the day really could care less if an artist is being ripped off or not, lets be serious, mainly because we think of artists like they are all Beyonce with a trillion dollars, but sorry to inform everyone there is a really strong portion of artists that aint getting paid.

lastdecember said:

It's all a combo of things done by the labels. Apple has done absolutely nothing to rip off the artists. The company put its neck and resources on the line and basically created the paid downloads market, bring additional revenue to the labels and, when the labels see fit, the artists as well. AFAIC, Apple has done all it can to help all parties benefit.

sosgemini said:

Its not a question of whos the bad guys here, the point is that is another hand taking away something, of course labels are the main issue, but the reason we dont see this extra thing is because its a convienance to the consumer, which is why no one took issue with stores like walmart or best buy and their cheaper prices. But if we go back to the beginning of CDS the idea was that the label was going to set a price that EVERY retailer had to sell a cd for, sounds fair, mainly because labels would charge a store 10-13 dollars per cd, and real music retailers who only sold music had to sell their cds in that range, but along came "big box" retailers and the labels caved in on their "flat price" for cds to chain stores and let everyone do what they want, but in return were revenue cuts from chains like Best Buy and Walmart to labels, obviously this drove retailers out of business which at the end of the day the labels could care less because it was a cut down on costs. Now into the digital age and theres a new cast this time around iTunes, well the issue mainly is, iTunes is a retailer and why should it get a cut? it has no employees in stores to pay, no rents to keep stores open etc... which is what drove retailers out of business because they werent given a cut of cds they sold. I somehow think we would care more if someone said Tower Records was selling cds and keeping 5 bucks of the price for themselves, thats really whats going on here too.

lastdecember said:

Because they created the whole damn market! Before the iTunes Music Store opened, no one was getting any money from downloads of the big labels' music. Besides, while Apple doesn't have rent, it certainly has employees (including support) in addition to bandwidth and promotional costs. And do we know whose employees are actually ripping/preparing the millions of files for download. My guess is they work for Apple.

AlexdeParis said:

I see your point but i cant let Apple of the hook like that, because at the end of the day its a corporation and its bottom line is to make their money and get their cut too, its not a free enterprise that came along and bankrupted itself to save music. I see the possible sacrifice but in the end money is still being taken from the artist, maybe its only 20% but on top of a label thats already taking 50-70%, its yet another problem that has to be dealt with. To be honest no one should get anything and all contracts re-worked to incorporate youtube,iTunes, everyone involved, because at the end of the day, people that are getting screwed are the artists, the writers of tv shows, etc..and who would even care about these companies if it werent for artists and writers.

lastdecember said:

Of course they want to make money! That's why I said "all parties benefit."


In the immortal words of Gwen Guthrie, "Nothing from nothing leaves nothing." There was no market at all before Apple created one. You honestly think they're not entitled to anything?


In a perfect world, OK. But the labels have been screwing the artists from the beginning. Unfortunately, the artists have been letting them.

AlexdeParis said:

But there again Apple still shouldnt get the cut of the music, retailers dont pocket money for cds they all lose money on music, could Apple take a loss? Sure its the label that wont move on this but instead of Apple or any other download store trying to cut into a label its drawing more from the artists, if Apple wanted to make a true stand it wouldnt allow music on their site till labels didnt do that, that to me would be sacrifice. It boils down to this, a store sells say the new Prince CD, for 9.99, now right off the bat the label is taking 50-70% of that in its own costs, now should the store that sells it be taking whats left? If the answer is yes than you would still have Music Retailers that closed down.
[Edited 1/3/08 20:18pm]