That doesn't appear to be the issue in this case. There's absolutely nothing that implies that the artist was paid a percent of gross margin (or net margin or anything else). Every article I've seen on the case says that the artist gets a fixed payment PER SONG.
There's nothing that implies that the artist's share depends in any way on cost. If it did, it would have nothing to do with Apple since Apple has absolutely nothing to say about the cost of distribution via CD. If it were a matter of the artist getting an incorrect share of the profits, the suit would have been against the record labels, not against iTunes.
In fact, it's opposite of what Maestro64 is stating in that suit was trying to get more money by stating that digital copies are masters, yet Maestro64 is correctly stating that they cost less to distribute than CDs. So for statement to make sense the jury would have had to lessen the amount that they get paid per download.
I agree that there needs to be a paradigm shift in the recording industry in order for it to survive; however, I don't think relatively minor contract disputes with small production companies are going to be much of a catalyst for change.
1. troberts was right, these artists need to make their own records and sell them on iTunes, DUH. No wonder they need labels if they cant figure out how to sell their own music.
2. It's always been all about distribution. The labels had the distribution chains in place, and that was their bank. Now Apple has it.
3. The paradigm shift has taken place. But the "industry" can not and should not survive it. The industry is bloated, corrupted, overwhelmed with its own hunger for power, and blind to evolving technology. This is an industry governed by raw, kindergarden-level capitalists, who are now at the mercy of a collegiate capitalist in Jobs, and he will eat them alive.
I will issue a formal prediciton that in less than ten years' time, the major artists will begin to forego their contract renewals, instead producing their own records and distributing them on iTunes, cutting out the labels, and retaining their fair 70% share. Established artists need nothing from labels. Only up-and-comers need a label for initial promotion anymore, and few even need that.
In fact, it's opposite of what Maestro64 is stating in that suit was trying to get more money by stating that digital copies are masters, yet Maestro64 is correctly stating that they cost less to distribute than CDs. So for statement to make sense the jury would have had to lessen the amount that they get paid per download.
you know...it just occurred to me that the labels technically don't do anything at all. In very specific terms, they send just a single master track to Apple, and Apple copies/distributes it on an as-needed basis.
The label, in reality, has no reproduciton costs whatsoever, they can not even claim the tiny amount of electricity required to power the computer that duplicates the bits and bytes.
Perhaps their argument should not be that digital copies are masters or not, but that a single master is handed to Apple, who then copies and distributes it...? would that even make any difference in the argument?
As others have stated, this was nothing more than a contract dispute. I work in the area of rights management. Rights are defined as a media, within a territory, within a contract period for a certain percentage. If Eminem signed a contract which declared that he was entitled to X percent in all media, he (or his representatives) can't complain now that they want a higher percentage for online sales simply because the distribution costs are lower. That should have been negotiated at the time the contract was signed. He could have had one rate for traditional sales and a different rate for online sales, which is frequently the case.
What the dispute actually seems to be about though is that he is maintaining that online sales constitutes the licensing of a master for which he was entititled to a higher rate. I think that could be argued both ways. The jury disagreed though. Going forward what I think you'll find is that there will be a clearer definition in future contracts to indicate that online sales are not master license sales.
As for the record labels, while we all might hate them just on principle, the fact is that none of them are making any money. The annual decline in sales even including revenue from digital downloads is increasing at enormous rates which are completely unsustainable. So it's not like the labels are making a killing and screwing the artists (like they used to.) No one is making money. And IMO, the small labels haven't done any better job in nurturing artists or creating great music than the large labels.
you know...it just occurred to me that the labels technically don't do anything at all.
On that front, no, but they do handle the promoting and front the bands money and setup gigs and all the other risks to find the artists that will turn them hefty profit.
But with so much advertising being pushed to social networking sites and other internet sites Apple does an opportunity to pay the artists more while making more money on iTunes. But then they'd have to deal with all the other stuff. Which they might not want to get involved with.
"However, a Los Angeles jury late last week sided with Universal's arguments, agreeing that a song sold online is no different from a song bought in a store."
So, are they going to reimburse me for upgrading my songs to DRM-free, which they would have been all along if Apple had its way?
wow, that is not good, the court is saying that cost for online music is the same as making and distributing a CD.
No, that's not how I read the case and the decision. This is what I see:
This was a dispute between Universal and the production company of Eminem.
The production company's argument was that the fees that Universal pays to Apple to sell music should not be considered as a "cost" to Universal.
The argument: that Apple's fees to sell digital music are being used by Universal to hide a portion of Universal's profits. In a nutshell, a scenario goes that Universal would give Apple something like $100,000 for all the sales in the past week, and then Apple would give Universal $50,000 back to Universal.
The court found that the production company didn't show that Universal is hiding any profits using this strategy. The money Universal pays to Apple is fully an expense that Universal incurs, and therefore is a "cost" to Universal.
The court did not decide or comment on what the price differences of physical distribution versus electronic distribution should be, and that was not part of the case.
No, that's not how I read the case and the decision. This is what I see:
This was a dispute between Universal and the production company of Eminem.
The production company's argument was that the fees that Universal pays to Apple to sell music should not be considered as a "cost" to Universal.
The argument: that Apple's fees to sell digital music are being used by Universal to hide a portion of Universal's profits. In a nutshell, a scenario goes that Universal would give Apple something like $100,000 for all the sales in the past week, and then Apple would give Universal $50,000 back to Universal.
The court found that the production company didn't show that Universal is hiding any profits using this strategy. The money Universal pays to Apple is fully an expense that Universal incurs, and therefore is a "cost" to Universal.
The court did not decide or comment on what the price differences of physical distribution versus electronic distribution should be, and that was not part of the case.
This had nothing to do with Apple either. It referred to ANY online distribution. Just another bullshit headline from AppleInsider. The lawsuit had nothing to do with Eminem, nor did it have anything to do with Apple. It was a production company complaining about online distribution.
From what I remember, the result of the last lawsuit is that Apple Inc. essentially owns all the rights to the "Apple" name now, and "Apple Corps" is a licensee of "Apple Inc.". This means "Apple Inc" can now do whatever they want with the name, including opening their own music label.
Actually the last lawsuit was dropped by Apple Corp after Apple Inc. offered to pay Apple Corp, supposily around $100 million, for all rights to the "Apple" trademark. And a life time license back to Apple Corp for the use of the "Apple Corp" trademark. When Apple Corp cease to exist, Apple Inc will retain the rights to the Apple Corp trademark.
I'm sure there some stipulation in the license that states that Apple Corp can not enter the computer business.
Online music is the same as CD prices, if you know where to go. First of all, Eminem had nothing to do with this lawsuit. It was brought on by FBT Productions, who signed him before he became famous. So they used his name for publicity, and they are trying to collect more money simply because he is popular.
You need to get out and go shopping. The new U2 CD is a perfect example. iTunes sells the standard issue CD for $9.99 (not the "deluxe" version, which is way over-priced at $17.99). Target sells the CD for $9.98, and Wal-Mart sells the CD for $9.97. So I can get the actual CD for the same price as iTunes, and I get the actual CD with printed liner notes.
If the artist doesn't like the contract established with the record label, they should go independent. The artist should make the same amount whether it is digital or CD. It doesn't cost that much for mass duplicating a CD versus the server maintenance for storing and offering the digital download.
The point is that the Music label are NOT providing the server maintenance or offering the digital download, Apple are providing those services. The record company have ZERO costs for downloads yet they take the same money as they do for CDs. Get your facts right!
On that front, no, but they do handle the promoting and front the bands money and setup gigs and all the other risks to find the artists that will turn them hefty profit.
But with so much advertising being pushed to social networking sites and other internet sites Apple does an opportunity to pay the artists more while making more money on iTunes. But then they'd have to deal with all the other stuff. Which they might not want to get involved with.
It seems then, a new type of management / marketing company opportunity. One that recognizes the reality of the current system and works with the artists and Apple (et al) in a way that's fair and profitable to all. I agree Apple would not want to get involved in any of this, so it will be interesting to see if any company steps up to fill the void. The current labels seem unable or unwilling to see the ground has shifted under their feet.
Comments
That doesn't appear to be the issue in this case. There's absolutely nothing that implies that the artist was paid a percent of gross margin (or net margin or anything else). Every article I've seen on the case says that the artist gets a fixed payment PER SONG.
There's nothing that implies that the artist's share depends in any way on cost. If it did, it would have nothing to do with Apple since Apple has absolutely nothing to say about the cost of distribution via CD. If it were a matter of the artist getting an incorrect share of the profits, the suit would have been against the record labels, not against iTunes.
In fact, it's opposite of what Maestro64 is stating in that suit was trying to get more money by stating that digital copies are masters, yet Maestro64 is correctly stating that they cost less to distribute than CDs. So for statement to make sense the jury would have had to lessen the amount that they get paid per download.
I agree that there needs to be a paradigm shift in the recording industry in order for it to survive; however, I don't think relatively minor contract disputes with small production companies are going to be much of a catalyst for change.
1. troberts was right, these artists need to make their own records and sell them on iTunes, DUH. No wonder they need labels if they cant figure out how to sell their own music.
2. It's always been all about distribution. The labels had the distribution chains in place, and that was their bank. Now Apple has it.
3. The paradigm shift has taken place. But the "industry" can not and should not survive it. The industry is bloated, corrupted, overwhelmed with its own hunger for power, and blind to evolving technology. This is an industry governed by raw, kindergarden-level capitalists, who are now at the mercy of a collegiate capitalist in Jobs, and he will eat them alive.
I will issue a formal prediciton that in less than ten years' time, the major artists will begin to forego their contract renewals, instead producing their own records and distributing them on iTunes, cutting out the labels, and retaining their fair 70% share. Established artists need nothing from labels. Only up-and-comers need a label for initial promotion anymore, and few even need that.
In fact, it's opposite of what Maestro64 is stating in that suit was trying to get more money by stating that digital copies are masters, yet Maestro64 is correctly stating that they cost less to distribute than CDs. So for statement to make sense the jury would have had to lessen the amount that they get paid per download.
you know...it just occurred to me that the labels technically don't do anything at all. In very specific terms, they send just a single master track to Apple, and Apple copies/distributes it on an as-needed basis.
The label, in reality, has no reproduciton costs whatsoever, they can not even claim the tiny amount of electricity required to power the computer that duplicates the bits and bytes.
Perhaps their argument should not be that digital copies are masters or not, but that a single master is handed to Apple, who then copies and distributes it...? would that even make any difference in the argument?
What the dispute actually seems to be about though is that he is maintaining that online sales constitutes the licensing of a master for which he was entititled to a higher rate. I think that could be argued both ways. The jury disagreed though. Going forward what I think you'll find is that there will be a clearer definition in future contracts to indicate that online sales are not master license sales.
As for the record labels, while we all might hate them just on principle, the fact is that none of them are making any money. The annual decline in sales even including revenue from digital downloads is increasing at enormous rates which are completely unsustainable. So it's not like the labels are making a killing and screwing the artists (like they used to.) No one is making money. And IMO, the small labels haven't done any better job in nurturing artists or creating great music than the large labels.
you know...it just occurred to me that the labels technically don't do anything at all.
On that front, no, but they do handle the promoting and front the bands money and setup gigs and all the other risks to find the artists that will turn them hefty profit.
But with so much advertising being pushed to social networking sites and other internet sites Apple does an opportunity to pay the artists more while making more money on iTunes. But then they'd have to deal with all the other stuff. Which they might not want to get involved with.
If it were a matter of the artist getting an incorrect share of the profits, the suit would have been against the record labels, not against iTunes.
The suit WAS against the record label and NOT against iTunes.
So, are they going to reimburse me for upgrading my songs to DRM-free, which they would have been all along if Apple had its way?
wow, that is not good, the court is saying that cost for online music is the same as making and distributing a CD.
No, that's not how I read the case and the decision. This is what I see:
This was a dispute between Universal and the production company of Eminem.
The production company's argument was that the fees that Universal pays to Apple to sell music should not be considered as a "cost" to Universal.
The argument: that Apple's fees to sell digital music are being used by Universal to hide a portion of Universal's profits. In a nutshell, a scenario goes that Universal would give Apple something like $100,000 for all the sales in the past week, and then Apple would give Universal $50,000 back to Universal.
The court found that the production company didn't show that Universal is hiding any profits using this strategy. The money Universal pays to Apple is fully an expense that Universal incurs, and therefore is a "cost" to Universal.
The court did not decide or comment on what the price differences of physical distribution versus electronic distribution should be, and that was not part of the case.
No, that's not how I read the case and the decision. This is what I see:
This was a dispute between Universal and the production company of Eminem.
The production company's argument was that the fees that Universal pays to Apple to sell music should not be considered as a "cost" to Universal.
The argument: that Apple's fees to sell digital music are being used by Universal to hide a portion of Universal's profits. In a nutshell, a scenario goes that Universal would give Apple something like $100,000 for all the sales in the past week, and then Apple would give Universal $50,000 back to Universal.
The court found that the production company didn't show that Universal is hiding any profits using this strategy. The money Universal pays to Apple is fully an expense that Universal incurs, and therefore is a "cost" to Universal.
The court did not decide or comment on what the price differences of physical distribution versus electronic distribution should be, and that was not part of the case.
This had nothing to do with Apple either. It referred to ANY online distribution. Just another bullshit headline from AppleInsider. The lawsuit had nothing to do with Eminem, nor did it have anything to do with Apple. It was a production company complaining about online distribution.
This suit seems to have been another case of big-huge-monster-company with the higher-priced lawyers beating the little guy.
Sometimes the little guy can be a jerk too, you know.
From what I remember, the result of the last lawsuit is that Apple Inc. essentially owns all the rights to the "Apple" name now, and "Apple Corps" is a licensee of "Apple Inc.". This means "Apple Inc" can now do whatever they want with the name, including opening their own music label.
Actually the last lawsuit was dropped by Apple Corp after Apple Inc. offered to pay Apple Corp, supposily around $100 million, for all rights to the "Apple" trademark. And a life time license back to Apple Corp for the use of the "Apple Corp" trademark. When Apple Corp cease to exist, Apple Inc will retain the rights to the Apple Corp trademark.
I'm sure there some stipulation in the license that states that Apple Corp can not enter the computer business.
Online music is the same as CD prices, if you know where to go. First of all, Eminem had nothing to do with this lawsuit. It was brought on by FBT Productions, who signed him before he became famous. So they used his name for publicity, and they are trying to collect more money simply because he is popular.
You need to get out and go shopping. The new U2 CD is a perfect example. iTunes sells the standard issue CD for $9.99 (not the "deluxe" version, which is way over-priced at $17.99). Target sells the CD for $9.98, and Wal-Mart sells the CD for $9.97. So I can get the actual CD for the same price as iTunes, and I get the actual CD with printed liner notes.
If the artist doesn't like the contract established with the record label, they should go independent. The artist should make the same amount whether it is digital or CD. It doesn't cost that much for mass duplicating a CD versus the server maintenance for storing and offering the digital download.
The point is that the Music label are NOT providing the server maintenance or offering the digital download, Apple are providing those services. The record company have ZERO costs for downloads yet they take the same money as they do for CDs. Get your facts right!
On that front, no, but they do handle the promoting and front the bands money and setup gigs and all the other risks to find the artists that will turn them hefty profit.
But with so much advertising being pushed to social networking sites and other internet sites Apple does an opportunity to pay the artists more while making more money on iTunes. But then they'd have to deal with all the other stuff. Which they might not want to get involved with.
It seems then, a new type of management / marketing company opportunity. One that recognizes the reality of the current system and works with the artists and Apple (et al) in a way that's fair and profitable to all. I agree Apple would not want to get involved in any of this, so it will be interesting to see if any company steps up to fill the void. The current labels seem unable or unwilling to see the ground has shifted under their feet.
The current labels seem unable or unwilling to see the ground has shifted under their feet.
Yes, do seem to try to resist change on every front, then seem shocked when things change. I really don't get it.
I figure Apple probably ran scenarios many times after the Apple Corp suit to see if that business was viable for them.