marnold
March 25th, 2009, 09:22 AM
Ars Technica has a review of a book called Appetite for Self-Destruction: The Spectacular Crash of the Record Industry in the Digital Age (http://arstechnica.com/media/reviews/2009/03/lancing-the-fing-boil-inside-the-major-labels-slump.ars") by Steve Knopper. Looks like I might have to read this one. Here's a snip from the review:
Looking back at the CD era, though, it's clear that those little plastic discs were a goldmine. People loved the new format, many repurchased their collections on CD, and prices for recorded music went way up. How did the industry respond to this windfall? By screwing the artists.
Knopper describes how the labels wrote new contracts to cover the new format, contracts which featured larger "packaging reductions" and "free goods allowances." In addition to the deductions, artist royalty rates were reduced. "After labels factored in these newfangled deductions," Knopper says, "typical artists received roughly 81 cents per disc. Under the LP system, artists made a little more than 75 cents per disc. So labels sold CDs for almost $8 more than LPs at stores, but typical artists made just six cents more per record."
Looking back at the CD era, though, it's clear that those little plastic discs were a goldmine. People loved the new format, many repurchased their collections on CD, and prices for recorded music went way up. How did the industry respond to this windfall? By screwing the artists.
Knopper describes how the labels wrote new contracts to cover the new format, contracts which featured larger "packaging reductions" and "free goods allowances." In addition to the deductions, artist royalty rates were reduced. "After labels factored in these newfangled deductions," Knopper says, "typical artists received roughly 81 cents per disc. Under the LP system, artists made a little more than 75 cents per disc. So labels sold CDs for almost $8 more than LPs at stores, but typical artists made just six cents more per record."