August 17, 2007 12:58 PM PDT
Hey Eminem, blame the system, not Apple
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That's the opinion of a half dozen copyright lawyers, including some who represent music artists, when asked about the copyright infringement lawsuit filed last month by Eight Mile Style and Martin Affiliated, the hip-hop star's publishing units.
But Eminem isn't the only star going after Apple. A records check showed that Apple is accused of copyright infringement in two other similar suits: one filed in May by a small label called Dawg Music and another from 2005 by Bridgeport Music, a publishing company with a history of filing such suits. None of the companies involved in the litigation, including Apple, agreed to comment for this story.
Don't expect these lawsuits to go very far. To start, Apple is likely indemnified against such lawsuits, according to copyright attorney Jay Rosenthal. But Rosenthal speculates that the real target of the lawsuits isn't Apple or iTunes. What the musicians and writers really want is to challenge the claim by record labels that they have the right to negotiate Internet sales on their behalf.
"This particular issue is a real sore spot in the industry," said Rosenthal, legal counsel for the Recording Artists' Coalition, a group formed in 1999 by musicians Sheryl Crow and Don Henley. "It's the gorilla in the room, and you're going to start seeing more of these suits as you start to see layoffs and cutbacks."
As compact-disc sales continue to slide, and royalties continue to get squeezed by piracy, more and more performers are growing dissatisfied with the money coming in from digital downloads. Rosenthal predicted that Apple may continue to get drawn into the fray as the music industry tries to prod CEO Steve Jobs to be more flexible with Apple's 99-cent-per-song price.
A growing number of performers, publishers and songwriters want a bigger share of that download revenue and want to see an overhaul of recording and publishing contracts. Among the artists who have expressed anger over their cut of download money are Cheap Trick and The Allman Brothers Band. They jointly filed a lawsuit last year that accused Sony BMG Music Entertainment of shortchanging them on digital-music sales.
"Digital music is going to continue to increase as a percentage of the overall market," said Brian Caplan, the attorney representing the bands against Sony. "As time goes on, I believe recording artists will be able to negotiate higher royalty rates on the downloading process."
But Mark Litvack, an intellectual-property attorney who has worked for Sony, Time Warner and Disney, said artists and publishers have to realize that slowing sales does not give them the right to demand more money. He points out that music labels are getting squeezed by piracy and falling CD sales as well.
"The fact that the artist is unhappy with the economic model isn't legally relevant," Litvack said. "They agreed to a deal to allow labels to distribute music at retail locations. There isn't any difference between the Web and the local record store. I think it's clear the labels have the right to sell over the Web."
"Heartbreak Hotel" for industry
Highly paid musicians won't get much sympathy from most of their fans. But not every performer or writer is living in a palace, argues songwriter Rick Carnes.
Just southwest of downtown Nashville, the much-heralded Music Row is a montage of platinum records, sheet music, cigarette smoke, steel guitars and Jack Daniel's. Music Row, where Carnes came to write music in 1978, is where gospel, country and rock music converge, the home of hundreds of publishing houses and record labels that once churned out some of the world's best loved music. This is where Elvis Presley--who died 30 years ago this week--recorded his first chart-topping single, "Heartbreak Hotel."

Music Row is now giving way to "nail shops and hair salons," according to Carnes, 57. He blames piracy, shrinking CD sales, the royalty rates that songwriters and publishers have been locked into for years, and the way revenue from downloads is divvied up.
"It's Armageddon," said Carnes, president of the Songwriters Guild of America, who has written hits for such stars as Garth Brooks, Reba McEntire and Dean Martin.
"We're getting crushed here. The day that hurt the most was driving down Music Row not long ago and seeing all the 'For Sale' signs. We're losing the canon of American music. I can't tell you how sad I feel when I see talented songwriters selling insurance."
By now, anyone following the music industry can practically recite the statistics. According to a report provided by the Recording Industry Association of America, unit sales and revenue from CD sales declined more than 12 percent in 2006. In 2005, they fell 8 percent.
To help the music industry in general, Carnes wants Apple to loosen its grip on download prices. The 99 cents that iTunes charges per song, according to Carnes, isn't enough to go around. And to the specific problems faced by songwriters, performers and publishers, Carnes wants the music labels to raise their royalties.
Royalty vs. license
To understand what artists are upset about, one has to pick through the complex way they are paid. Artists are compensated on a royalty structure for traditional CD sales. When a CD is sold at a retail store, say at a Wal-Mart Stores outlet, the artist receives about 16 cents. The music publisher gets 9.1 cents.
In Cheap Trick's lawsuit, the band alleges that after labels deduct for things like "breakage," the band earns only 4.5 cents on every 99-cent digital download. So what's breakage? The costs incurred by things like damaged CDs, packaging charges and restocking. Of course, there's no such thing as a damaged CD in downloads, making such a charge highly questionable, the band argues.
Some musicians would like download payments to be structured like fees for music that's licensed to movies, television shows, ringtones or commercials. When that happens, the artists and labels split the proceeds from the license after the publisher takes its 9.1 cents. If that structure were to apply to downloads, the artists and labels would split whatever's left after Apple, and the publishers takes their cuts. The assumption is that this would lead to more money going into the pockets of the musicians.
"I represent artists, and you always have disagreements between artists' lawyers over contracts," Rosenthal said. "But I've yet to run into a single artist attorney who thinks any differently about this. We all agree that when it comes to iTunes' sales, revenue should be split between the artist and label 50-50."
In the meantime, there is some reason for hope, according to Carnes. He notes that Apple, in a partnership with EMI, has agreed to sell unprotected MP3 files for 30 cents more than the standard 99-cent price. He's also seeing a little money from ringtones. Still, he says he no longer writes music for recording artists. He has turned to writing jingles for commercials.
"It's really funny how everyone thinks that only rich labels are getting hurt," Carnes said. "The labels are the last to get hurt. The first are the very poorest: artists and songwriters, and they'll be the first ones out of the business."
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35 comments
Join the conversation! Add your comment
eminem is an artist) will lose in court and realize the trouble is with
the music industry.
Apple would be SOOO sad to sell their music directly from artist to
buyer and make more profit for both them and the artist. the
recording industry middle men need to die a slow and painful
death.
Strayform is about transforming the digital media system from passively receiving some product to being a part of the creation process, working with the producer, and taking advantage of an open system.
I say 100% to the artist and NOT A SINGLE CENT to the "Record Labels"!!
The old days are over. The artists no longer need to be indentured servants to the members of the RIAA.
Technology has made recording and distributing music easy and inexpensive. There is no longer any need for "Record Labels".
Death to the greedy dinosaurs.
Long live the artists.
out and sign a contract with a big label, but why do they need them
after they become a household name anyway? Going after Apple
isn't going to solve their problem, they don't decide how much the
artist gets and charging more to the consumer is the wrong way to
go too.
I agree that the Labels aren't the fairest ones out there, but if there was a better way, that way would be mainstream by now.
Thangs are changing and will continue to change, but how do you go from nothing to big money without a Label?
(Yeah, a few have done it, but not many.)
We're post industrial revolution now. We have free time. That free time should be used creating whatever form of art you have been gifted to create, and making our culture a richer one.
I intend to put all art that I ever create under the GNU license if code, and under the CC by-sa license if anything else.
And I intend to have a real job.
other people who are actual artists have to do the same.
There is still a great market for art of all kinds. Yes, it's VERY
difficult to support ones self (let alone family) as an artist. Still,
it does occasionally happen.
It's hard to believe that an artist that sells half a million CDs would only get $80,000. I don't think Madonna became the richest person in England at 16 cents a song.
I don't know if any of this is true, but I've also heard that the aritst has to repay for stuff like studio time, video production, and promotion, and any cash advance they've recieved, out of that royality... So, they don't actually start collecting cash royalties until all that stuff is coverted
<a class="jive-link-external" href="http://www.cnn.com/interactive/entertainment/0101/cd.price/frameset.exclude.html" target="_newWindow">http://www.cnn.com/interactive/entertainment/0101/cd.price/frameset.exclude.html</a>
Where is the songwriter-musician these days??
To many egotists and not enough dedicated musicians ( and by
dedicated I don't mean they'll do anything to get a contract, I
mean
people that actually put the time in and hone their craft!) Three
chords and a bass drum or synth track and your today's Star.
THAT's why the record industry is hurting, and the overpriced
CDs for one or two decent tunes.
who does the RIAA, MPAA, and other groups represent? middle men.
if it wasn't for protection from Congress, the FTC and FCC, and the Bush administration, the record labels would've already gone the way of the dinosaur.
The only way to eliminate this type of pricing rigidity / stranglehold is for there to be competition. And for many consumers, iTunes is it.
In a sense, iTunes looks a bit like Walmart in how it has started to dictate business practices in the consumer products industry.
that if they can sue iTunes into charging . . . hmmmmm . . .
$5.00 per song that they (the artist) will magically get a bigger
piece of the pie?
It's not iTunes nor any other online distributor. It's the recording
industry a$$hole!
CD's were always over priced and the record industry always
found ways to stick it to the artist like charging them for things
like "breakage" ;-)
With online sales there is no "breakage", no printing costs for
covers, cover art, blank CD's, CD cases, packaging, distribution,
etc. - But the Record Industry still only gives the "Artist" the
same pittance of a royalty it gave when there WAS AN ACTUAL
PHYSICAL PRODUCT!
Sue the Record Idustry you idiot and then you can make more
money from crap songs like "$hit On You" without trying to
force the consumer (your fans) to pay more for an already
overpriced product.
p.s. upping the price to the consumer = Going back to
Napster/BitTorrent/allofmp3.com = No money for you dipshit!
year. Forbes had a list of the top earners in hip-hop. Hip-hop
alone. Doesn't include the other genres. Eminem-$18 million, and
he was only 6th. The top 5 made a total of $135 million. I don't
know a lot about the music industry, but it appears to me that
these guys are getting their share.
that goes way back to the days when songwriters wrote songs
and record companies actually nurtured and helped artists.
Apple did not invent it.
The publishing/publisher you hear about was an entity or
person who supported (hired and paid advances) songwriters
while exploiting (in a good way) the songs, getting them
performed and recorded by artists or placing them in any kind
of venue and actually publishing sheet music, which people used
to buy.
The record companies exploited (in a good way) the artists;
helping ?develop? them, covering costs of recording and
handling printing, promoting, distributing and selling records..
those wax (eventually vinyl) disks.
Things like ?breakage? (a percentage reduction of units for which
royalties are paid) were legitimate at the time, because the
accounting was for records SHIPPED, and a good percentage of
those shipped were actually broken and not sellable. But now,
although still in many contracts, it?s NOT legit.. and labels also
deduct percentages for ?promotional?; all the ones they give
away even if they don?t give away any, and lots of other little BS
things that just up their take significantly? at the artists
expense.
And yes, they basically charge the artist for literally ALL the
costs of recording, printing and promoting an album. The artists
generally get an advance in order to pay recording costs, that
must be recouped before any real royalties are paid. And the
cost of recording under an advance is often pretty inflated. Final
royalties are often misreported, underpaid, or legally swindled
away by uncrupulous lawyers and managers.
All this is to say that the redcord companies are greedy, immoral
and severly narcisistic entities that don?t really give a rats ass
about the music or the music loving consumers or the artists. In
fact, the concept of a REAL artist has been altogether flattened
by the record-companie-turned-corporate-marketing-machine
model that has overwhelemed the music industry with ?artists?
like brittany spears, fake rock bands, most of hip-hop, lip-
syncing models and pre-packaged ?products?. They?ve made
moguls out of many, but waiters out of lots and lots of
legitimate artists.
The point is this : True artists and songwriters have a right to
complain and a right to collect money for their work? just as
much as novellists or sculptures or painters or photographers.
It?s not the artists fault that record companies overcharge and
underpay. It?s not their fault that the record companies have
created an industry that cranks out crap, rewards mediocrity and
invests more money in lawyers and marketeers than in people
who love, understand or create music.
Let the record companies die the horrible death they brough on
themselves. Pray that future record companies get back in the
business of MUSIC, respect the artists, and stop giving us
dumb-ass "stars" like eminem who who have no idea how lucky
they are to even be making a living at music.
about?
been known to criticize Apple. I base this on facts though. Reading
about the issue at hand before you post your opinion tends to be
helpful and make your view more valuable.
off the artists...???? It's the RIAA that's ripping off the Artist every
time a CD is sold..!!!!
Tell you what artists, we'll continue to do File Sharing and gladly
send you double (32 cents) directly for each album we download.
-Rick Carnes
Dang it. This guy is still the President of the Songwriters Guild of America? I remember getting an email from Rick Carnes about two years ago in response to an article that I wrote about the Grokster case in my university's newspaper. He came off as arrogant and condescending to say the least. I sent him a 4-5 page dissertation which corrected many of mistakes he made and while he admitted that I held some pretty fervent beliefs he never directly responded. He gave the classic big shot response: "I'm busy right, now...I'll get back to you later." Two years later and I'm still waiting for his response. The article brought me about $100 and some personal satisfaction, but not the response from Carnes that I expected.
He claimed that his views were independent of the RIAA, but in actual practice his differences in opinion and the RIAA are minute to say the least. I must have the email somewhere around here. If I find I should post it online for some laughs.
Carnes actually called a lot of the small time artists "losers." The record labels are more of a nuisance than a benefit for most artists. Their heavy handed and often illegal influence ensures that most artists who don?t play into record label industry cabal and surrender a huge margin of their profits wouldn?t get radio airplay. Without airplay selling discs and concert tickets is an uphill battle. Based upon my correspondence Carnes sees the Songwriters Guild as a body that only looks after the big time artists who have a stake in the status quo. His idea of raising the cost of music tracks will lead to greater piracy, which ironically will hurt the very artists that he purports to be trying to support. It is simple economics; if piracy is rampant it tells you that the price of most music is above the ideal price that would maximize profits. A certain amount of "piracy" is natural, but as prices increase the potential advantages to "piracy" rise while the costs of "piracy" largely stay the same. He is correct that the cost of the music needs to be flexible, but the flexibility ought to be downward not upward.
Emusic even after a recent price hike is selling tracks for about half what many of the other download services are and they are the second most popular download service with a tiny fraction of the marketing budget of iTunes. If 99c is too little, how is it that artists are making money on Emusic? With increasing consumer income and falling costs why can?t everybody except the record labels and the brick and mortar retail music stores win? Consumers would be able to buy an immense amount of music and artists can have a larger piece of the pie. The music could easily cost less and the artists still make just as much per track if not more than they do now.
Increasingly the cost of the product makes little sense when the cost of delivery is rapidly approaching zero. Bandwidth costs just keep getting cheaper and cheaper. Hardware also gets cheaper and cheaper. As the number of tracks increases the cost per track for the software development for the online store also approaches zero. When you are talking about Billions of tracks sold like with iTunes the cost of delivery for an album are a few cents at best. Only Apple's accountants have an exact cost of running the iTunes music store, but the cost of a single track is easily less than a cent. Apple could take half of the cut that a Wal-mart or BestBuy takes for a CD and still make more money, because their operating costs are so much lower. The cost of advertising didn't go up, so shouldn't the artist(s) pick up the vast majority of the remainder of the profits?
I'm still waiting for my response from Rick Carnes. I have a good feeling that I will never hear back from him.
So when are we all going to get off our collective ***** and do something?
Eminem, when your contract expires, don't sign another one. Put out a few crappy albums to finish out the remainder of your obligation. Tell the fans what you're doing if you're worried about your rep... you'd be surprised how many will applaud your balls.
Apple is stuck - they can't stop selling back catalog, but they could start negotiating contracts directly with musicians going forward to eliminate the labels. They'd be in a position to actually do some good for the music industry - paying artist a fair compensation, charging the fans a fair price - all while making a nice profit.
PEOPLE: stop posturing and start boycotting labels for real. You **** and moan, while standing in line to hand over more of your money - so the bottom line is the labels have no reason to pay any attention.
In the meantime, between the death of radio, the dearth of crappy artists and probably a bit of middle age setting in, the industry has lost me as a customer. CDs are too expensive. Downloads are WAY too expensive, inferior product and I refuse to support ANY DRM scheme that limits me as a paying customer from fairly using my content. And I'm just simply not going to "rent" my music. I don't even pirate anymore, it's just not worth the hassle for the crap that's out there. But I have a daughter who is a few years away from starting to purchase music and you can bet I'll be showing her the way... if things don't improve, I'm sure "the way" will include some options that skirt the "evil empire" that exists now.
I'll teach her how to take all she wants and support the artists through direct contributions that go 100% to the artist. Maybe as someone in the tech industry I should get busy now creating the model and a website that makes such contributions possible and easy...
The funny part will be watching the industry try to spin the idea that sending money directly to an artist and circumventing their accounting system is detrimental and killing the music industry and hurting the artists! lol
I bet you have some good local bands where you live. Go out and buy some of their music.
Our demands are simple better music, to many songs with wining, sad lyrics and melodies. It is no wonder the country is depressed. No DRM. There are already laws that make it a crime to steal music, don't make it a crime (DMCA) to take advantage of my legal rights.
J H F
Sites such as <a class="jive-link-external" href="http://www.tunecore.com/" target="_newWindow">http://www.tunecore.com/</a> already offer this no strings attached direct sales service easily and for a very low cost, including obtaining UPC and ISRC numbers. This is no black art magic. Amounts labels charge artists for such basic things is simply shameful.
Artists in the process of signing contracts should think about such services and refuse contracts that prohibit them from directly selling their music online. That's where most of their revenue will be 3 to 5 years from now, if not sooner.
With digital recording, mixing, affordable CD production and printing, DIY online music publishing, what's left for big labels ?
Marketing ? as if ad agencies would not happily handle that !
As label's stranglehold disappear, the cost of music will decline while increasing income for those who actually write, perform, record and publicize the music we love.
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כנגד עיניו רואה פורטל <a class="jive-link-external" href="http://www.pimps.co.il/" target="_newWindow">Pimps</a> את הגולשים כחלק אינטגרלי מן האתר. רבים מן התכנים המצולמים מועלים ע"י גולשי האתר, אם זאת באמצעות השתתפות במאבקי -<a class="jive-link-external" href="http://www.pimps.co.il/index.php?return=crews.php" target="_newWindow">באטלים</a> בין הקבוצות השונות (ה-<a class="jive-link-external" href="http://www.pimps.co.il/index.php?return=crews.php" target="_newWindow">Crews</a> ) והצגת <a class="jive-link-external" href="http://www.pimps.co.il/index.php?return=dances.php" target="_newWindow">הדרכות ריקוד</a> או סתם הצגת קטעים בהם המשתמשים נהנים להציג עצמם רוקדים ועוד.