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iTunes: the “i” stands for “indecent”, says record company

Vivendi, parent of Universal Music Group, says Apple’s cut of iTunes tracks is indecent:

“The split between Apple and (music) producers is indecent … Our contracts give too good a share to Apple,” Vivendi Chief Executive Jean-Bernard Levy told reporters at a gathering on Monday organized by the association of media journalists in France.

At present, UMG, the world’s largest record company, gets 0.70 euro ($0.99) out of the 0.99 euro retail price charged by iTunes, Vivendi said.

70% to the record company seems pretty decent to me: the PPD (published price to dealer) for a CD that sells at £15 is £8. Distributor takes around £2 of that, and the remaining £6 goes to the label, the artists etc. So “indecent” here seems to mean “more than we get for CDs”.

There’s a practice in music called “change a word, get a third”. It’s when a songwriter is told that the talent wants a cut of the songwriting royalties because he or she has changed the lyrics, and the writer has a stark choice: get two thirds of loads, or 100% of nothing. It strikes me that with music shops, the record companies have a similar choice: let Apple sell your stuff in big numbers and grumble about it while pocketing the money, or demand a bigger cut and sell only through Virgin Digital. Oops, that one’s just shut down, hasn’t it?