Sony To Court: Of Course We're Allowed To Contractually Screw Over Our Artists

from the that's-how-this-works dept

For quite some time now, we've been pointing out that the hatred directed at Spotify and other music streaming services in some circles is misplaced. Spotify is paying out a ton of money to the copyright holders (approximately 70% of its revenue). The problem is that much of that money is staying with the labels rather than being passed on to the artists. Earlier this year, in fact, we wrote about a detailed report by Ernst & Young, in cooperation with a European music label trade group, that revealed just how lopsided some of these deals end up being:
That's the breakdown of how subscription fees are distributed. The vast majority goes to the labels and only a small portion goes to artists and songwriters directly. Now, some of that label money may make it to artists through other means -- eventual royalty payments should an artist ever recoup, but we all know how rare that is.

And that brings us to an interesting lawsuit that was actually first filed last year from a bunch of artists associated with American Idol, filed by "19," a management company connected to the show. Originally, the lawsuit had been a typical one concerning the question of whether online streaming counts as a license or a sale for the purposes of the contracts (music contracts pay much higher rates to artists for licensing rather than "sales" and there have been a bunch of lawsuits around that). However, once the Sony-Spotify 2010 contract was leaked a couple of months back, the lawsuit was amended to specifically argue that Sony chose to structure its deal with Spotify in a way that purposely kept revenue from artists.

Sony has filed its response, which pretty much directly admits that it has every right to negotiate contracts with third parties that screw over artists:
The implied covenant does not require SME to structure its affairs in whatever way yields the greatest royalties for 19
It further cites an earlier ruling in this very case, in which the judge said that Sony Music is under no obligation to maximize revenue for artists if it benefits Sony:
...as Judge Abrams already has held, SME can “act on its own interests in a way that may incidentally lessen the other party’s anticipated fruits from the contract.”
Furthermore, Sony points to the details in the contract that it signed with 19, which flat out says that Sony is free to receive revenue in other forms that don't lead to royalties.
19 cannot claim that the parties intended that SME would not receive consideration on a general or label basis (such as in the form of an advertising credit), rather than on a basis tied to the use of a particular sound recording, because 19 expressly agreed that it “shall not be entitled to a share of income received by or credited to [SME] on a general or label basis."
The filing from Sony also (rightly) mocks the claim that Sony did some "self-dealing" because it has "control" over Spotify and wanted to benefit Spotify. Noting that it holds approximately 6% of the equity in Spotify, it points out how that is a rather small equity position, and not one that gives it any real control.

Sony Music is absolutely right here. 19 signed a contract that handed over control to Sony Music, and Sony Music appears to be living up to that contract exactly. That the contract itself has a bunch of ways in which Sony can screw over the artists isn't Sony breaking the contract. It's the artists and 19 agreeing to a bad contract that they no longer like -- something that all too frequently happens in the recording industry. Sony's actions in its dealings with the artists and with Spotify may be morally questionable on the issue of whether it's really helping artists, but from a legal and contractual standpoint, it's difficult to see how 19's argument has much of a chance in court. It seems likely to get tossed out pretty quickly.

But, the big point remains: in the end it's not the music services that are to blame for small royalty checks to artists. It's the bad deals that artists themselves continue to sign with labels.



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  • identicon
    Baron von Robber, 9 Jul 2015 @ 10:51am

    So from now on, when somebody cries "Piracy takes away from the content creators!", they will instead need to cry "Piracy takes away 16.8% from the content creators!"

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  • icon
    Mason Wheeler (profile), 9 Jul 2015 @ 10:51am

    But, the big point remains: in the end it's not the music services that are to blame for small royalty checks to artists. It's the bad deals that artists themselves continue to sign with labels.

    Seriously? That's the takeaway here? You had me right up until the last couple paragraphs, and then everything went off the rails.

    Someone really needs to look up the concept of a "leonine contract" and why they're unacceptable in civilized society.

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    • identicon
      cpt kangarooski, 9 Jul 2015 @ 11:02am

      Re:

      They are unacceptable. But that's still mostly between the artist and the label. The bad streaming contract would not be so bad if the artist had not signed away his rights to the label, which is the basis for the label being a party to the streaming contract to begin with. It's difficult to see why artists are attacking streaming services while defending their traditional relationship with labels.

      reply to this | link to this | view in chronology ]

      • identicon
        Erik, 9 Jul 2015 @ 11:22am

        Re: Re:

        Because the label paid them an advance.

        I have no clue why artists continue to sign these kinds of deals. 20 years ago you needed a label for distribution. Now (and for the last 15 years) you have not.

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 9 Jul 2015 @ 11:31am

          Re: Re: Re:

          Because they get a big payday up front.

          However artists lose the right to complain when they voluntarily sign a contract that screws them.

          reply to this | link to this | view in chronology ]

          • identicon
            Pragmatic, 10 Jul 2015 @ 5:36am

            Re: Re: Re: Re:

            The trouble with having big dreams of global fame, $ signs in your eyes and an idea of copyright as the cash cow that keeps on giving is you can't see contract terms clearly. Why do you think the studios and labels been pushing the idea of copyright as property?

            I'm not sure artists actually realize what they're signing when they put pen to paper.

            reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 9 Jul 2015 @ 11:51am

      Re:

      That type of contract is actually a great argument for song writers/producers and artist associations to be strong enough to partake and actually influence negotiations between music labels and streaming services.

      It is completely unacceptable for labels to be able to negotiate others conditions without sufficient counterpush, just like it is unacceptable for governments and companies to do so in trade negotiations!

      reply to this | link to this | view in chronology ]

    • icon
      JMT (profile), 9 Jul 2015 @ 7:53pm

      Re:

      I'm not sure what your complaint is. Can you explain how Mike's clear statement of fact is "off the rails"?

      reply to this | link to this | view in chronology ]

  • identicon
    RightShark, 9 Jul 2015 @ 10:57am

    Contracts

    Ultimately, it is all Google's fault.

    reply to this | link to this | view in chronology ]

  • icon
    jilocasin (profile), 9 Jul 2015 @ 11:15am

    So when artists are complaining about streaming services....

    So when artists are screaming over how streaming services are harming artists and impoverishing them, what they are really trying to say is that they think the purple should be even smaller than it is, so that their orange is a little bigger. Ignoring the big green elephant in the room.

    According to the graphic the service is already handing over 62.4% of all revenue to compensate creators for the music they stream.

    52.4% of which is going to the artists/labels.

    Since the ratio of artist to label is about 14.9%, even if the streaming service gave the artists/labels another 20% [leaving the platform with only 0.8%] the artists share would only increase to about 9.78%. Of course the labels portion would balloon to an amazing about 55.82%.

    So there you go, in the simple unbiased universal language of math. As most anyone who was paying attention has already been saying, it's not the streaming service that's harming artists, it's their contracts with the labels.

    On the other hand, streaming platforms get the artists music in front of many more people than would otherwise get to hear it. This creates new opportunities for an enterprising artist to actually make money than they have previously enjoyed.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 9 Jul 2015 @ 11:33am

      Re: So when artists are complaining about streaming services....

      So when artists are screaming over how streaming services are harming artists and impoverishing them, what they are really trying to say is that they think the purple should be even smaller than it is, so that their orange is a little bigger. Ignoring the big green elephant in the room.

      The big green elephant can stop distributing their music if they annoy it, so of course they pretend its not the elephants fault.

      reply to this | link to this | view in chronology ]

      • identicon
        Baron von Robber, 9 Jul 2015 @ 1:49pm

        Re: Re: So when artists are complaining about streaming services....

        The big green piggy elephant could stop trumpeting about how stream hurts artists but yet gobbles up so much of the artists' reward.

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    • identicon
      Anonymous Coward, 9 Jul 2015 @ 8:12pm

      Spotify pays 70% only to the major labels

      The major trouble with that big green section is that it needs to be re-labled to read 'major labels', because thats who it's going to.

      Say I'm a musician either on a small indie label or self releasing my own records, there is none of that green triangle for me or indie label, that went only to the majors. All the indies get is the red and the orange.

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  • identicon
    Anonymous Coward, 9 Jul 2015 @ 11:20am

    it's not just Spotify and similar platforms that have all the hatred directed at them, it's customers too and obviously, pirates'. but if the studios weren't so damn greedy, for doing next to nothing, then the artists would get what they should and overall prices would be a lot lower. that would reduce the 'piracy' part because when someone can get a legal copy of something for a price he/she is prepared to pay, a price they consider the product is worth, there would be no point in not buying it. the price would remove the risk rather than how it is atm, the price is worth the risk!!

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  • identicon
    anonymous coward, 9 Jul 2015 @ 11:27am

    sign your contracts in a jurisdiction that protects you?

    I know that in Australia, trade in goods and services are governed by the Consumer Protection Act. AUS has recognised that unconscionable trader conduct and misuse of market power are significant threats to an efficient, functioning "free market". "Free market" doesn't mean "free to do whatever the fuck you like". Reducing this down to contract law and caveat emptor is a facile argument. If the US legal system can't make judgements that maintain a functional free market then it has no business ruling on business. And in a market of recurring transactions, 'buyer beware' usually turns into 'buyer was beaten savagely and left in a ditch' - so SME may want to rethink using the argument "hey we're pricks but that's ok cos you said we could be". I note their public image is not good right now either given the email leaks.

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  • icon
    lucidrenegade (profile), 9 Jul 2015 @ 11:41am

    In summary:

    Fuck Taylor Swift

    reply to this | link to this | view in chronology ]

  • identicon
    AnonCow, 9 Jul 2015 @ 11:58am

    The labels don't care if the individual streaming services go out of business or there is wholesale consolidation, so they will continue to push for a larger piece of the streaming pie even to the detriment of the industry.

    That fact should terrify artists and should be the center of their complaint. Not the rates paid by the streaming services.

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  • identicon
    TypicalArtist, 9 Jul 2015 @ 12:02pm

    I signed away my fortune for fame. Now I want the fortune too.

    (but I don't understand my own industry well enough to blame the right group for my dissatisfaction)

    reply to this | link to this | view in chronology ]

  • This comment has been flagged by the community. Click here to show it
    identicon
    Anonymous Coward, 9 Jul 2015 @ 12:08pm

    You know who else "screws" artists? Pirates. Yet you won't read about that on Techdirt.

    reply to this | link to this | view in chronology ]

    • icon
      ottermaton (profile), 9 Jul 2015 @ 12:22pm

      Re:

      You know who else "screws" artists? Pirates.

      Those pirates who spend more on "content" than the average consumer in study after study after study after study? Those pirates?

      Boy, I wish I could get "screwed" like that.

      Yet you won't read about that on Techdirt.

      As a matter of fact, I have. But not in the way you mean.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 9 Jul 2015 @ 6:54pm

        Re: Re:

        Those pirates who spend more on "content" than the average consumer in study after study after study after study? Those pirates?

        Boy, I wish I could get "screwed" like that.


        Do artists make any money on the content those pirates illicitly download? No. Your answer makes no sense. Of course it was voted insightful. It's Techdirt.

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 9 Jul 2015 @ 8:48pm

          Re: Re: Re:

          They don't make money from pirates. They don't lose money from pirates.

          They don't make money from music sales. They don't lose money from music sales.

          They don't make money from suing pirates. They pay lawyers a shit-ton to sue pirates.

          reply to this | link to this | view in chronology ]

        • icon
          Karl (profile), 9 Jul 2015 @ 9:05pm

          Re: Re: Re:

          Do artists make any money on the content those pirates illicitly download? No.

          Would they have made any money if the pirates had not illicitly downloaded the content?

          No.

          reply to this | link to this | view in chronology ]

          • icon
            That One Guy (profile), 9 Jul 2015 @ 9:30pm

            Out of the frying pan, into the fire(but now with self-righteous satisfaction as you roast)

            Yeah, that's probably the funniest part of the argument to me. The idea that piracy is just so bad, and if people don't want to or can't pay they should 'do without' seems to gloss right over the fact that someone 'doing without' is also not paying. In neither case is the artist getting paid right now, but the person 'doing without' is also much less likely to pay in the future.

            Congrats, you waved your magic wand and forced all the pirates to 'go without', guess how much you're making now? Nothing, just like what you were getting from file-sharing before!

            (Oh, and your sales just plummeted, something about the pirates who were buying more than non-pirates now not buying as much, but who cares, you stopped piracy!)

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            • identicon
              Anonymous Coward, 10 Jul 2015 @ 3:02am

              Re: Out of the frying pan, into the fire(but now with self-righteous satisfaction as you roast)

              Piracy is just another word for stealing when used in the framework of economics. Everything falls apart with your debate after that.

              reply to this | link to this | view in chronology ]

              • icon
                MrTroy (profile), 10 Jul 2015 @ 3:33am

                Re: Re: Out of the frying pan, into the fire(but now with self-righteous satisfaction as you roast)

                Well then, there's your problem. We can't help you much if you're trying to build a business model on a broken framework.

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              • icon
                PaulT (profile), 10 Jul 2015 @ 3:36am

                Re: Re: Out of the frying pan, into the fire(but now with self-righteous satisfaction as you roast)

                "Piracy is just another word for stealing when used in the framework of economics"

                Would it kill you guys not to make idiotic arguments that depend on the redefinition of words and basic concepts? It's possible to argue against piracy without constructing a parallel reality from which to do it. The words and definitions in the real world work just fine.

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              • icon
                That One Guy (profile), 10 Jul 2015 @ 4:01pm

                Re: Re: Out of the frying pan, into the fire(but now with self-righteous satisfaction as you roast)

                Well except for the whole 'copying/file-sharing/piracy doesn't deprive the creator/copyright owner of anything other than potential sales at most', unlike actual stealing, which causes an actual loss of scarce goods.

                Really, stop trying to redefine words in your arguments. It's old, and it doesn't work. It's 'file-sharing', or 'piracy' if you want, not stealing. Believe me, despite using the word in an attempt to make an emotional plea, the last thing the studios and labels would want is for file-sharing to actually be legally treated as stealing.

                "Oh, you downloaded a movie or CD's worth of songs? Pay a fine well under $100 and you're free to go", rather than "Oh, you downloaded a movie or CD's worth of songs? Either settle for 'only' a couple thousand, or fight it out and potentially face a fine in the hundreds of thousands range."

                As for the 'Everything falls apart after that'? No, it really doesn't. Whether piracy is treated as copyright infringement or stealing, the base facts remain the same. Neither the person who 'does without', or the person who pirates, are spending any money on the content at the time, so from a sales perspective both are pretty much indistinguishable from each other, making the 'if you can't pay, then do without, don't pirate' argument a ridiculous one, as neither group is paying.

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              • icon
                JP Jones (profile), 10 Jul 2015 @ 4:53pm

                Re: Re: Out of the frying pan, into the fire(but now with self-righteous satisfaction as you roast)

                In what economic theory is this true? "Hollywood Accounting Theory?"

                Because actual economic theories would disagree, as would the law itself. And even if piracy were somehow considered stealing in economics, terminology alone would not miraculously change reality.

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              • icon
                Karl (profile), 11 Jul 2015 @ 10:48am

                Re: Re: Out of the frying pan, into the fire(but now with self-righteous satisfaction as you roast)

                Piracy is just another word for stealing when used in the framework of economics.

                Absolutely false. In the framework of economics, piracy is the same thing as perfect competition.

                And the rule of perfect competition is that the product's price naturally gravitates towards its marginal cost - the cost to make one more copy. In the case of a digital file, the marginal cost is zero.

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          • identicon
            Anonymous Coward, 10 Jul 2015 @ 2:56am

            Re: Re: Re: Re:

            uh, wut?

            What a bizarre false dilemma you just threw out there.

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            • identicon
              Anonymous Coward, 10 Jul 2015 @ 5:31am

              Re: Re: Re: Re: Re:

              What's so false about that?

              If someone doesn't download something it's called "doing without". It's not going to have an effect on a non-existent purchase for which the label is going to keep in the first place.

              Unless you're suggesting that magically, not downloading something results in the artist getting paid...

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              • icon
                PaulT (profile), 10 Jul 2015 @ 6:46am

                Re: Re: Re: Re: Re: Re:

                I think what he's going for is that, if you read it a certain way, Karl's comment seems to propose 2 outcomes (pirate or don't pirate), when of course there's several other options that aren't considered(don't pirate but still buy/stream/whatever).

                That's missing the point (that whether the labels like it or not, simply not consuming their content is a valid option for which they still get nothing). But, it's easier for the ACs to argue semantics in other peoples' comments than address the nuance of reality.

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            • icon
              Karl (profile), 11 Jul 2015 @ 11:21am

              Re: Re: Re: Re: Re:

              What a bizarre false dilemma you just threw out there.

              It's not a false dilemma at all. The original AC was saying that piracy is wrong precisely because rights holders do not make money on the copies that the pirates made.

              I'm simply pointing out the fact that they also won't make money on the copies that were never made - the works that were never pirated.

              You may certainly believe that piracy is wrong, but it can't be wrong only because rights holders don't get paid. They won't get paid either way.

              reply to this | link to this | view in chronology ]

        • icon
          That One Guy (profile), 9 Jul 2015 @ 9:19pm

          Re: Re: Re:

          You mean the same people who buy more than non-pirates, as multiple studies have shown? Oh yes, clearly artists are making absolutely no money from those increased sales, as it's all vanishing into the ether thanks to the magic of piracy disintegrated the money before it can make it to them.

          It's not like this is that difficult to grasp, but as I'm feeling generous, I'll try and explain.

          Say you've got two people, Person A, and Person B.

          Person A doesn't download anything, and the only music they have in their collection is stuff that they paid for. They buy perhaps 1 or 2 albums every few months.

          Person B downloads fairly often, and they have an extensive collection of music, some paid for, most not. However, they also buy much more music, and tend to pick up 3-4 albums every few months, if not more.

          Whether you're looking to maximize sales(current or potential), or increase the number of people listening to your music, people like Person B are much more helpful, even taking their downloading habits into the equation.

          reply to this | link to this | view in chronology ]

        • icon
          PaulT (profile), 9 Jul 2015 @ 11:48pm

          Re: Re: Re:

          "Your answer makes no sense. "

          No, it makes perfect sense *(especially if you're honest enough to read the linked studies. Alas...).

          Despite your whining, this is not a zero sum game. Your entire industry was predicated for decades on giving away free access in return for higher revenue sales. "Lost" sales on low margin song sales can also translate into higher margin merchandise, concert or other revenue. People also buy music after listening to pirated copies, meaning that although they make no revenue on the free copy, they get revenue on the sale that would never have existed beforehand. And so on...

          You should know this by now, yet you play the ignorant fool. I say "play" because nobody's actually this stupid.

          "Of course it was voted insightful. It's Techdirt."

          Of course. This is a site generally populated by people who have reading comprehension, nuanced thought processes and the ability to consider more than one factor of a situation at once. I apologise if you lack any of these qualities.

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        • identicon
          Anonymous Coward, 10 Jul 2015 @ 8:17am

          Re: Re: Re:

          In the fantasy world of the RIAA people should pay for music before they hear it and decide whether or not they like it. In the real world people like to listen to music before deciding whether or not to buy it.
          Stop people listening to music for free, in some convenient fashion, and they either find an alternative method of listening to the music before making buying decision, or they simply do not buy music. So while nobody who pirates music buys every track that they pirate, the do find a lot more music that they like, and so they end up buying more music.

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    • icon
      PaulT (profile), 9 Jul 2015 @ 2:09pm

      Re:

      "Yet you won't read about that on Techdirt."

      Well, you know, apart from all the articles that do talk about it. Especially those that point out how much piracy tends to go down when services like Spotify are allowed to service the demand, and the multitude of ways of doing business that either make such losses irrelevant or actively leverage them for higher profits than simply selling/streaming a copy of the music can provide.

      But, you know what you won't get from an AC around here? Honesty for one, but a simple admission that the major labels they tirelessly defend are part of the problem. Somehow, accepting that both pirates and the labels are causing problems is beyond their simple capacity for thought, so they have to take sides and attack those discussing reality and solutions that don't attack paying customers.

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      • icon
        UriGagarin (profile), 9 Jul 2015 @ 2:39pm

        Re: Re:

        maybe he/she/gender neutral personal pronoun meant groupies#. Cos they'll be the next bunch who will want a slice .
        ** that was sarcasm/irony (difficult to properly define in comments **

        Actually has there been a case of the source of inspiration suing for royalties ?
        How long before someone gets somewhere is now the question ?

        Which leaves the last thing - if you can't talk about things, people or events where will the creativity come from ? abstract concepts negative numbers ? hah they can't sue!!!


        *copyright the songs i=sqrt(-1);
        Lyrics :
        NaN

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        • icon
          nasch (profile), 9 Jul 2015 @ 3:37pm

          Re: Re: Re:

          Actually has there been a case of the source of inspiration suing for royalties ?

          when the question is "has there been a case of the [someone] suing for royalties?" the answer is yes.

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    • identicon
      Anonymous Coward, 9 Jul 2015 @ 6:00pm

      Re:

      So are you acknowledging that records labels are to blame, or that pirates, like record labels, are blameless?

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 9 Jul 2015 @ 6:57pm

        Re: Re:

        So are you acknowledging that records labels are to blame, or that pirates, like record labels, are blameless?

        When a pirate illicitly downloads something, $0 goes to the artist. It's a fact. And it's an uncomfortable fact for the Techdirt Nation. That's why they have to hide any post mentioning it. Pathetic.

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        • identicon
          Anonymous Coward, 9 Jul 2015 @ 9:40pm

          Re: Re: Re:

          And when the label keeps the money, what goes to the artist?

          reply to this | link to this | view in chronology ]

          • icon
            That One Guy (profile), 9 Jul 2015 @ 10:21pm

            Re: Re: Re: Re:

            Oh but that's totally different. When a labels screws over an artist and keeps all the money, leaving the artist with nothing, that's completely acceptable, because they signed a (utterly one-sided) contract that makes it legal and right for the label to do so.

            When a pirate doesn't pay the artist though, that's a terrible thing, because they didn't sign a contract that allows them to do so!

            Remember, screw someone over with a contract, and it's perfectly fine, and the fault of the fools who didn't expect the person offering the contract to do anything and everything in their power to rob blind the ones signing.

            The fault is always, always, to be placed on the one signing the contract, never the one who wrote it, much like you're supposed to blame the one who played the rigged game, rather than the one who rigged it in the first place.

            reply to this | link to this | view in chronology ]

        • icon
          PaulT (profile), 9 Jul 2015 @ 11:57pm

          Re: Re: Re:

          You know what's funny? Despite your whining, lying and personal attacks, you're yet to defend the actual focus of the article. Even if we were to get rid of piracy tomorrow, your heroes would still be ripping off the artists you and they claim to defend. But, you're happy for those people to be robbed blind because they were fooled into signing a contract.

          If you want pathetic, look at someone who feels he has to white knight a bunch of cartel criminals because he thinks he's spotted someone worse. Yet, when faced with a site that discusses how to get rid of pirates and corporate scam artists alike, all he can do is lie about them in order to defend his preferred set of con artists. Now, that's pathetic.

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        • icon
          JP Jones (profile), 10 Jul 2015 @ 4:31pm

          Re: Re: Re:

          And when I choose not to buy something at all, $0 goes to the artist. So are you saying that someone who chooses not to purchase a good is stealing?

          Because the uncomfortable fact is that money is only lost if the person would otherwise have purchased the product. Since actual evidence implies that those who pirate the most also purchase the most, the most logical conclusion is that, if anything, not pirating is stealing, not the other way around, because those who don't pirate spend less on content!

          It's not an uncomfortable fact for anyone who understands basic economics. Ever heard of "advertising?" People generally don't pay for ads, they're given out for free, and companies spend billions producing them specifically to give them out for free. If $0 is going to the person creating the ad, why are they spending so much money creating them?

          Oh, right, because ads make money by promoting a scarce good while utilizing a non-scarce good. This is literally Marketing 101. Yet copyright has managed to break this economic fact by trying to convert infinite goods into scarce goods, and then everyone seems to be shocked when people don't follow the rules.

          People have been trying to regulate the economy forever, and the most common result is that the people that can influence the regulations get rich at the expense of everyone who can't. That's because economic principles simply don't care about laws other than how those laws try and bend them out of shape.

          The sad part is that regulation is necessary for a thriving economy. Once the regulation becomes "beneficial" rather than punitive, however, it tends to shift money to those who are on the benefit side rather than punish those abusing the natural imbalances of the economic system.

          And, surprise surprise, that's exactly what we're seeing.

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  • icon
    nasch (profile), 9 Jul 2015 @ 12:16pm

    Majority

    The vast majority goes to the labels...

    45.6% is not a majority, vast or otherwise.

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    • icon
      jilocasin (profile), 9 Jul 2015 @ 12:32pm

      Depends on what you are talking about.... [Re: Majority]

      That depends on what you are talking about.

      62.4% of revenue is handed over to compensate creators.

      Of that amount 45.6% goes to the labels.

      45.6% is more than 50% of 62.4%.

      Therefore the vast majority is going to the labels.

      reply to this | link to this | view in chronology ]

    • identicon
      Digitari, 9 Jul 2015 @ 12:43pm

      Re: Majority

      now now, we are using REAL math here, not record label math


      we are not starting with 100% but 70% which 45% goes to the record labels. 16.8% goes to artists/songwriters

      lets make it simple for you.

      You have 70$

      I take 45$

      who has more?

      compare 45$ to 16.8$

      nearly 3 times more, a "vast" majority

      reply to this | link to this | view in chronology ]

    • icon
      JoeCool (profile), 9 Jul 2015 @ 12:45pm

      Re: Majority

      Majority is compared against other SINGLE groups, not ALL other groups combined. 45.6 > 20.8 by a huge margin, so yes, it IS a vast majority.

      reply to this | link to this | view in chronology ]

      • icon
        Dan (profile), 9 Jul 2015 @ 12:58pm

        Re: Re: Majority

        From the article:
        That's the breakdown of how subscription fees are distributed. The vast majority goes to the labels

        The article states that a majority of the subscription fees goes to the labels. A majority is more than 50%. Thus, the article is incorrect. The point remains, however, that much more goes to the labels than anywhere else.

        The article's point is correct. The wording used to express that point is incorrect.

        reply to this | link to this | view in chronology ]

        • icon
          JoeCool (profile), 9 Jul 2015 @ 1:33pm

          Re: Re: Re: Majority

          You're picking ONE possible definition of majority, and not the one that applies here. Majority can also mean "the greater quantity or share" (from Merriam). This is the most common usage of majority when applied to situation like the one in the article.

          reply to this | link to this | view in chronology ]

          • icon
            MrTroy (profile), 9 Jul 2015 @ 11:44pm

            Re: Re: Re: Re: Majority

            Even Dan's own link agrees. That semi-colon in there, it separates related definitions:

            1. the greater part or number; the number larger than half the total (opposed to minority): the majority of the population.

            reply to this | link to this | view in chronology ]

        • identicon
          Lurker Keith, 9 Jul 2015 @ 8:10pm

          Re: Re: Re: Majority

          Take the tax into account. You can't count tax, since none of the parties get it. That goes to the Government.

          So, we go from 100% to 83.3%. 45% is MORE than half of 83.3%. Thus, the labels do get a majority of the money going to the relevant parties.

          In fact, artists & song writers, combined, barely get more than the taxes paid. A tenth of a percent more than the taxes. How is that right?

          reply to this | link to this | view in chronology ]

  • identicon
    David, 9 Jul 2015 @ 12:58pm

    What about taxes?

    Hasn't anyone mentioned that the government almost makes as much as the platform, and more than the artists or publishers. If the government would just reduce those taxes, maybe the artists could get paid a little more.

    reply to this | link to this | view in chronology ]

    • icon
      nasch (profile), 9 Jul 2015 @ 1:03pm

      Re: What about taxes?

      If the government would just reduce those taxes, maybe the artists could get paid a little more.

      Yeah, but only a little. And as hard as it is to get major music labels to change, getting Congress to change the tax code in a particular way is probably even harder.

      reply to this | link to this | view in chronology ]

    • icon
      That One Guy (profile), 9 Jul 2015 @ 1:38pm

      Re: What about taxes?

      Please, eliminate taxes entirely and the label would demand all the money that was just freed up. The artist's percentage would rise 1-2% from that at best.

      reply to this | link to this | view in chronology ]

    • icon
      jilocasin (profile), 9 Jul 2015 @ 1:40pm

      Re: What about taxes?

      Hasn't anyone mentioned that the not even the government makes more than the labels do?

      Oh wait.... I think someone did.


      -------------------------------------------------------

      Once upon a time there was a river that was flooding the village. A brave pilot brought his single barge to the shore to rescue the people.

      A wealthy man brought 100 pieces of luggage with him, trunks and suitcases, and baskets of knickknacks.

      The pilot had 5 drums of fuel.

      The towns people, some with only a single bag of all their worldly belongings, most with nothing tried to escape the rising water.

      All but two towns people manage to get on board the barge.

      As the water rises, the remaining people wail and gnash their teeth screaming at the pilot for wasting too much room with all that fuel If only the pilot wasn't so greedy, they too could be saved.

      Other people, take up the call and start berating the greedy selfish pilot.

      Meanwhile the wealthy man raises his voice to add;

      "If the pilot wasn't so greedy, I wouldn't have had to leave my remaining luggage behind.


      And the people say amongst themselves;

      "See even the wealthy man agrees that the problem is the greed of that despicable pilot causing all of our troubles.

      reply to this | link to this | view in chronology ]

    • icon
      JMT (profile), 9 Jul 2015 @ 8:08pm

      Re: What about taxes?

      They have to pay taxes just like any other business. Why should they get to contribute less than others just so artists can get more?

      reply to this | link to this | view in chronology ]

  • identicon
    Ed Allen, 9 Jul 2015 @ 1:45pm

    Getting out of a contract

    So if almost all artists know that the contract they have is bad for them then why do we not see lawyers
    lining up to break those contracts ?

    I am sure some here will be unsympathetic to artists gullible enough to think that THEIR experience
    would be different but contracts being one sided are usually labeled "scams" or "confidence schemes"
    which we mostly agree should be treated as crimes.

    So, where are the lawyers ?

    reply to this | link to this | view in chronology ]

    • identicon
      Baron von Robber, 9 Jul 2015 @ 1:57pm

      Re: Getting out of a contract

      Waiting for the artists to be able to afford to pay them.

      reply to this | link to this | view in chronology ]

    • icon
      That One Guy (profile), 9 Jul 2015 @ 2:03pm

      Re: Getting out of a contract

      Under what grounds? The contract is incredibly one-sided, that's plain for all to see, but it is a legal contract, as even the judge agreed, and as I'm sure most honest lawyers would admit(the dishonest ones of course would insist that sure they have a case, rack up the billing hours, and then laugh all the way to the bank when their client gets stomped). This doesn't stop it from being an incredibly sleazy thing for the labels to do, far from it, but 'sleaze' has nothing to do with contract legality.

      As for why do they sign? Because most of them don't know how bad the contracts they're signing are, until it's far too late. Even then, some of them are too stupid to realize just who it is screwing them over, and rather than blaming their labels, they'll lash out at everything else, like streaming services for 'not paying enough'.

      reply to this | link to this | view in chronology ]

    • icon
      PaulT (profile), 9 Jul 2015 @ 2:13pm

      Re: Getting out of a contract

      "So, where are the lawyers ?"

      Working for the people who can afford to pay them a huge sum rather than those who don't yet have anything.

      Who do you think writes those one-sided contracts?

      reply to this | link to this | view in chronology ]

    • icon
      JoeCool (profile), 9 Jul 2015 @ 4:44pm

      Re: Getting out of a contract

      Artists CAN use the law to get out of one-sided contracts, but it's expensive and takes a long time. The only example I can think of offhand is the band Boston. They were actually sued by CBS, rather than the other way around, and managed to win after years in court. It helped that Scholz (who is basically the entire band) never needed the band to make a living, so the long years in court didn't affect him like it would someone like Taylor Swift.

      reply to this | link to this | view in chronology ]

    • icon
      JMT (profile), 9 Jul 2015 @ 8:14pm

      Re: Getting out of a contract

      Check out the documentary 'Artifact' about how EMI sued Thirty Seconds To Mars for $30M in response to them trying to get out of their terrible contract. It's an eye-opener.

      reply to this | link to this | view in chronology ]

  • identicon
    David, 9 Jul 2015 @ 3:18pm

    Well...

    But, the big point remains: in the end it's not the music services that are to blame for small royalty checks to artists. It's the bad deals that artists themselves continue to sign with labels.

    Well, take a look at the typical size of the legal department of a record label, and at the typical size of the legal department of a musician.

    Then take a look at the number of recording associations offering contracts, and the number of musicians taking them, and the options for either to just go elsewhere.

    Now guess who gets to say "ok, the deal is either this or none" more often.

    In short, that is one setup where leaving the free market to sort things out is not likely to result in balanced results.

    Letting things run free without outside oversight or regulation is not going to end up in fair dealings, period.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 9 Jul 2015 @ 5:12pm

      Re: Well...

      "...the options for either to just go elsewhere"

      That's the point, artists actually have those options now.

      Of course, there are compromises. If I sell widgets, maybe I can sell them online, one at a time, for $10 each. Or I can sign a contract with Walmart, who can sell a million of 'em, as long as I can supply them at 89 cents each. Business is full of hard choices.

      reply to this | link to this | view in chronology ]

  • icon
    Greevar (profile), 9 Jul 2015 @ 3:31pm

    Music Labels

    Business model or Venus fly trap? Story at 11.

    reply to this | link to this | view in chronology ]

  • This comment has been flagged by the community. Click here to show it
    identicon
    Anonymous Coward, 9 Jul 2015 @ 6:12pm

    TOBAL, oh wait, there is, and it ain't pretty. In fact the majority flip a middle finger to it. But the minority is in charge so...the ten commandments is enough law in our home. The rest is due to the offspring of Lucifer, or is that congress?

    reply to this | link to this | view in chronology ]

  • identicon
    me@me.net, 10 Jul 2015 @ 4:41am

    This is exactly why

    the Music and Movie "industries" should and frankly need to die.... Music is an artform, not a commodity, and even if I'm wrong, it belongs to the artist, not some asshat at Sony. The industry is bluntly a pasasite, nothing more. F*****g die already.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 10 Jul 2015 @ 5:42am

    Is that a 3D pie chart?

    I would have expected Techdirt to know better than to use a misleading way to represent data. The tilt on a 3D pie chart makes the sections at the top appear smaller to create the illusion of depth.

    There is nothing wrong with a flat, 2D pie chart. Unless you're one of those people who thinks people can't accurately judge angles.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 10 Jul 2015 @ 1:12pm

      Re: Is that a 3D pie chart?

      It's the pie charts fault!!

      reply to this | link to this | view in chronology ]

    • icon
      JP Jones (profile), 10 Jul 2015 @ 4:39pm

      Re: Is that a 3D pie chart?

      It would be more misleading if all the actual percentages weren't listed on the chart. A 2D pie chart would give virtually the same conclusion based on the numbers presented.

      I'd be fairly shocked if someone thought: "Man, I was convinced that the 45.6% going to labels was bad, but then I realized it was a 3D pie chart and that the 45.6% actually looked closer to 46.7% compared to the rest, so my conclusion is now totally different!"

      Yeah, right.

      reply to this | link to this | view in chronology ]

  • identicon
    Steve, 30 Oct 2015 @ 9:48am

    no

    huh?

    reply to this | link to this | view in chronology ]

  • identicon
    Donny, 30 Oct 2015 @ 9:53am

    hi

    is that all you meat heads do is sit around on the internet sniffin each other's chocolate crax and snivelin about giant companies that scorch musicians?

    reply to this | link to this | view in chronology ]


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