In the eloquent words of Emeril Lagasse, "Bam". Members of Cheap Trick and The Allman Brothers Band, two
veteran rock acts that signed deals in a pre-digital universe have sued Sony BMG for unpaid royalties.
The
heart of the complaint lies in "packaging costs", which are deducted from royalties paid to artists when
music is pressed to CD (or in the case of The Allman Brothers.. vinyl). Both Cheap Trick and The ABB claim that they
are being dramatically underpaid, being that digital downloads have minimal, if any, packaging costs associated.
"A major label
like Sony BMG likely receives 80 cents of every 99 cent download. Out of that 80 cents, 4.5 cents goes to the Allmans
based on their existing terms. "
So that leaves 75.5 cents to Sony per track. You'd think,
with scratch like that, they could develop
a better root-kit. To their credit, they have at the very least spent wisely on lobbyists.
Cheap Trick, Allman Brothers Sue Sony BMG Over Digital Distribution
Reader Comments
(Page 1)2. Honestly, when I wrote the post I was thinking that sounded a little off. Still, I was able to find this price breakdown http://www.cdfreaks.com/news/8407 that claims around 63-65 Cents per track to the label (pre-artist royalty). That's still a big number, and much higher in terms of percent of sale than walking into a brick and mortar retail CD store would net.
Posted at 7:37PM on Apr 28th 2006 by Grant Robertson
3. The 80 cents figure has been mentioned numerous times over the past few years. The labels have never confirmed or denied it. Here's one story that references it:
http://business.timesonline.co.uk/article/0,,9075-2068200,00.html
When I sent a similar source to Mr. Ballantyne, dated from around the time he claimed to be intimately familiar with these pricing negotiations, he didn't bother to respond. Imagine that.
Posted at 9:53PM on May 1st 2006 by David Utter
4. Thanks David! I appreciate the link, I'll keep it around for the next time someone tries to tell me the labels aren't making a killing.
Posted at 10:13PM on May 1st 2006 by Grant Robertson
1. 80 cents??? Where are they getting their information? The labels DO NOT receive $0.80 our of $0.99.
This David Utter guy is just pulling numbers out of his ass.
Posted at 6:43PM on Apr 28th 2006 by Darryl Ballantyne