iTunes prices to go up, says EMI boss

The boss of EMI says iTunes prices will have to go up, because the labels aren’t making enough money. According to the article:

Artists, represented by music publishers, take home only around 6 cents from every 99 cents sale, with recording rights holders earning around 65 cents.

By charging more, the labels will pay the artists more. But perhaps they should be trying to cut their costs to get the same end result.

Here’s an unlikely hero: ginger whinger Mick Hucknall of Simply Red. Where most acts get $0.06, Word magazine reports that Hucknall gets around ten times that amount. The difference? He’s no longer with a record label. SimplyRed.com is completely independent, so not only does Hucknall get the artist royalty, but he gets the record company slice too. That’s a lot of money.

What that means is: you can keep iTunes prices the same but make ten times the cash, simply by not re-signing your record deal when it expires.

Now, let’s say you’re Radiohead. You’re reaching the end of contract with your record label (I think, but I’m not sure, that Radiohead are currently between deals). Why bother re-signing for a paltry royalty rate when you can deal direct with iTunes and get all of the money, not just the little chunk left over after the label and distributors have taken their cut? You can jump off the album/tour/album bandwagon, do whatever the hell you like without interference, and make more money.

Record labels are important – without them, many bands wouldn’t break – but as Arctic Monkeys and the various MySpace bands are demonstrating, you can carve out a reasonable career without being on a label. At the other end of the scale, yer U2s, yer Radioheads, yer Robbie Williamses… do they really need record labels at all? The labels need them – the money from their sales pays for the next tier of bands, and a delayed Coldplay album is enough to make a label’s share price plummet – but do the big bands need the labels any more?

If I were the head of a major record label, I’d be absolutely crapping myself.

3 thoughts on “iTunes prices to go up, says EMI boss

  1. Stephen says:

    By charging more, the labels will pay the artists more? Yeah right.

    You’ve got to admire the colossal chutzpah. Apple designs and creates iTunes, drags the labes kicking and screaming into it, makes it a huge success, makes nothing from it directly, gives them 65% of the gross, and they don’t like it? Supposedly because of the “poor old artist”? Where do they find these guys?

    I don’t know that the labels are essential. I hate all the artists they spend big money on promoting. I’ve discovered more music that I like in the last year through iTMS, blogs, friends, and general net surfing, than I did from listening to the radio etc. I went to a concert on Sunday by an artist who has never had any promotion in this country of any sort. There were plenty of people there.

  2. Stephen says:

    And this action by EMI is another example of the labels, unable to deal with Apple in the business arena, trying to get public opinion to put pressure on Apple, just as Sony tried to do with their ridiculous “we wouldn’t need this onerous DRM if Apple would just license iTunes DRM to us”. The sooner they self-destruct from their internal contradictions, the better.

  3. Gary says:

    > By charging more, the labels will pay the artists more? Yeah right

    But Stephen, they are the defenders of the artists!

    OKOKOK maybe not.

    > I don’t know that the labels are essential

    I think they are, particularly for bands/artists who don’t want to sully themselves with the business side of the music business. But for bands willing to do the work themselves…

Comments are closed.