Apple and artists make music industry sandwich

Stan Beer
Wednesday, 03 May 2006 22:26

Your IT - Home IT

The music recording industry has called the shots with artists and retailers for so long that it's hard to feel sorry for them now that the big companies are being squeezed. In fact they are being squeezed from both sides and are a bit like the meat in a sandwich between Apple Computer and the artists they exploited for many years.

As reported yesterday, Apple Computer has defeated the combined might of the world's largest record companies and forced them to adhere to its pricing policy. Consumers can continue downloading music from Apple's online music store, iTunes, for 99c a track.

Also reported last week 1970s rock bands Cheap Trick and The Allman Brothers are suing their recording label Sony Music for allegedly short changing them over royalties from iTunes and other digital music downloads. Sony gets 70c for each song sold online and, according to the bands, deducts 20% of the revenue for packaging and 15% for breakages, which amounts to 24.5c per download. At present the bands receive 4.5c per download but claim they should receive 30c.

Thus, we see that Apple has put a ceiling on what the music companies can wholesale its music for and, if the bands succeed in their legal suit, a class action from all artists is likely to follow which would put a floor on how much the music companies can pay for their talent for each download. It appears that the digital age has changed the music industry forever and is set to usher in a bonanza for everyone in
the music business except the middle men.