Music Diary News: Major Label Artists Get $0.08 for Each Digital Song Sold for $1!

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Music Diary News: Major Label Artists Get $0.08 for Each Digital Song Sold for $1! Listen to this article

Music Diary News: Major Label Artists Get $0.08 for Each Digital Song Sold for $1!

This week we got news of rapper Chuck D suing Universal Music Group (UMG). As part of the court documents analyzed by Digital Music News, his lawyers revealed the payout process … and if you can figure out what all of the stuff in the image at the top MEANS – let me know!

The bottom line is that on a $1 recording sold on iTunes (or Amazon MP3 for that matter), Apple gets 30%, the artist gets 8% and the label gets 62%.

Looking deeper, the document is based on 1,000 unit sales – which would be $1,000 … we start with the total units, but then suddenly there is a discount taken – in terms of units! This means that 15% comes off the top, not from the MONEY but from the units sold. I can only guess that this is a way to keep the contract numbers high while taking a larger cut.

So now we have only ‘sold’ 850 units as far as the artist is concerned. Fine. Taking the 70% remaining after the iTunes cut, we have $595 (of the $700 UMG collected), which then gets cut by 25% for a “Container Charge for Audiophile Records”, leaving ~$450. The next line tells us the artist is SUPPOSED to get 24%, so this should be ~$112, right? Wrong – because that “audiophile deduction” is back to take 25% of THAT away … leaving the artist with just over $80!

I am not suggesting that the label shouldn’t get a sizable chunk – they are shouldering most of the risk and the overhead etc. But as shown on the document above, they are SUPPOSED to be getting 24%. Shouldn’t that mean that the artists would get $168 out of every 1,000 copies sold? I mean, that IS a simple 24% of the 70% cut UMG gets from the 1,000 sales. And, in fact, it is how many other places like TuneCore work.

But like so much in the music business … nothing is ever quite as it seems.

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About the Author

Michael Anderson
I have loved technology for as long as I can remember - and have been a computer gamer since the PDP-10! Mobile Technology has played a major role in my life - I have used an electronic companion since the HP95LX more than 20 years ago, and have been a 'Laptop First' person since my Compaq LTE Lite 3/20 and Powerbook 170 back in 1991! As an avid gamer and gadget-junkie I was constantly asked for my opinions on new technology, which led to writing small blurbs ... and eventually becoming a reviewer many years ago. My family is my biggest priority in life, and they alternate between loving and tolerating my gaming and gadget hobbies ... but ultimately benefits from the addition of technology to our lives!