RIAA Accounting — How Labels Avoid Paying Musicianshttp://news.slashdot.org/article.pl?.../07/13/1737224
"Last week, we discussed Techdirt's tale of 'Hollywood Accounting,' which showed how movies like Harry Potter still officially 'lose' money with some simple accounting tricks. This week Techdirt is taking on RIAA accounting and demonstrating why most musicians — even multi-platinum recording stars — may never see a dime from their album sales. 'They make you a "loan" and then take the first 63% of any dollar you make, get to automatically increase the size of the "loan" by simply adding in all sorts of crazy expenses (did the exec bring in pizza at the recording session? that gets added on), and then tries to get the loan repaid out of what meager pittance they've left for you. Oh, and after all of that, the record label still owns the copyrights.' The average musician on a major record deal 'gets' about $23 per $1,000 made... and that $23 still never gets paid because it has to go to 'recouping' the loan... even though the label is taking $630 out of that $1,000, and not counting it towards the advance. Remember all this the next time a record label says they're trying to protect musicians' revenue."
by MightyMartian (840721) writes: on Tuesday July 13, @02:19PM (#32890778) Journal
That may apply in some cases, but one case I have been following (mainly because I'm a huge fan) is Robert Fripp's multiyear odyssey to get UMG to give him a proper accounting of King Crimson's royalties. He has fairly good evidence that the band has not been properly paid out, but because of the complexity involved due to the mergers and buy-outs and such of publishing companies and the like, whether through maliciousness or incompetence, he and his band have been screwed. What's more, there is some pretty good evidence as far as online sales go that King Crimson has not seen royalties at all, and worse, in many cases, the artists were never even asked, despite a good deal of control over the release of recordings that the Crimson still holds. Fripp tried for some time to get to talk to someone, anyone, in a position of authority who could produce an accounting of earnings and royalties, and finally had to sue UMG, and only now is he finally getting some movement.
The general methodology of UMG, at least, is to delay, obfuscate and obstruct, claiming at times that it can't answer questions from subordinate companies, or forcing artists to deal with individuals who ultimately have no authority to answer or compel someone else to answer the artist's requests. While I suppose it could be colossal incompetence, I posit that the system is purposefully set up to steal money owed to artists.
The same thing has happened over at EMI, where the Beatles have been forced to sue over withheld royalties. I'm assuming every record company and major label probably uses the same tactics to screw over artists.
by jemenake (595948) writes: on Tuesday July 13, @02:19PM (#32890792)
I read "Confessions of a Record Producer" where the dude gives you the step-by-step breakdown of where all of the money goes. One of the interesting ones is that the record companies now take out more for every CD pressed than they did for pressing LP's or cassettes, even though it's actually cheaper to make CD's.
He said that, every time he'd be at a cocktail party and someone would find out he's a record producer, they'd always ask "So, if I made an album that went gold, how much money would I get?". He proceeds to go through the cost accounting (which he describes earlier in the book) to arrive at some number like a 4-piece band making a gold record results in each member getting something like $23,000 or something. Don't quit your day job, fellas!
Also, back when Napster was really rolling, and the RIAA was freaking out, I recall reading an article by Janice Ian (a 70's 3-hit wonder) saying that she never got a statement from her record company that didn't say that she owed them money.
If you watch the RIAA's behavior carefully, you'll see that they're not really about attacking "piracy". They're trying to prevent any kind of delivery mechanism which takes them out of the loop... that connects the artist directly with the listener. "Disintermediation" is the big word for it. I recall several years back, there was a website (I forget it's name) where unsigned bands could post their songs as mp3's and they'd tag them with what known bands they thought they sounded like. So, you could go on there and search for "Dead Milkmen" and you could find all of these undiscovered bands who were influenced by them.
... and, of course, the RIAA figured out how to sue them into oblivion, even though they weren't really infringing on copyrighted material.