Search Salon

- - - - - - - - - - - -

Recently in Salon Technology

Sex sells, doesn't it?
Tales of financial chaos at the heart of an online porn empire.
By Mark Gimein
[12/01/99]

Technology: View from the top
The music man
MTVi's Nicholas Butterworth says he wants the audience to do the programming.
By Janelle Brown
[11/29/99]

The man who fell to mirth
David Bowie makes light of van Gogh's ear, Ziggy's future and sowing "creative wild oats" in a chat about Omikron.
By Janelle Brown
[11/24/99]

Review
A soul-sucking parallel world
Will you free the residents of Omikron's totalitarian regime or lose yourself in the beauty of this game's futuristic city?
By Janelle Brown
[11/24/99]

Swords, spells and Academy Awards?
Diablo II vies to be the first role-playing game to be sanctified by Hollywood.
By Jamais Cascio
[11/23/99]

Complete archives for Technology

- - - - - - - - - - - -

- - - - - - - - - - - -

- - - - - - - - - - - -

Revenue streams in from music fans buying CDs and digital downloads, from advertising and from the artists themselves, who split revenues from CD sales and sometimes pay for placement on the sites. And all of this revenue is based on inventory the online music distributors obtain free.

"No one's paying independent artists right now," says Brandon Barber, product manager of digital music for Tunes.com, which was just acquired by EMusic. Tunes.com, a music hub that runs RollingStone.com, TheSource.com and DownBeatJazz.com, offers professional music reviews and Webcasts of concerts in addition to downloadable music. According to Barber, Tunes.com is considering paying artists in the future for downloadable music and taped performances, but is "trying to be as agnostic as possible until a standard emerges."

The creators of the music could point to copyright law, which is supposed to ensure that artists get paid when companies make money off their music. Why aren't online music distributors coughing up performance and mechanical licensing fees like everybody else?

Simple: They don't have to. Not to independent artists, anyway, who -- unlike their label-backed counterparts -- often lack both business savvy and bargaining clout. Eager for exposure at any cost, many indie artists sign contracts giving away those rights.

Most online music distributors realize this is a contentious point and say they are trying to negotiate the issues of artist profits and copyrights. Jim Werking, president and CEO of AustinMP3.com, says his company is among those that do not currently compensate artists. But his start-up that distributes downloadable MP3s by artists in Austin, Texas "plans to create opportunities for artists to profit from their work." As Werking puts it, "Nobody knows what's going to happen with online music."

"It's absolutely ridiculous," says Vicky Moerbe, a veteran of the music business and current manager of Austin favorites W.C. Clark and Seth Walker. "The Webcast contracts I've seen expect musicians to sign away everything. Not just the right to broadcast their shows, but to archive them, turn them into CDs, make money off them from now until forever -- all without paying the musicians a dime. You know, musicians make little enough as it is, and here these companies are trying to get rich off them."

The American Federation of Musicians, the largest professional musicians' union in North America, agrees.

"The bottom line is that these companies want to distribute recordings without even attempting to compensate the artists," says Ginger Shults, vice president of the Austin chapter of the federation. "We're very concerned."

To be fair, not all online music distributors require artists to give away all rights in all circumstances. MP3.com, for example, doesn't compensate musicians for individual tunes that are downloaded or sold as part of a sampler (multiple artist compilation) CD, but does share revenues from selling artists' full-length CDs off the site. According to MP3.com's site, the 50 percent paid to artists in these cases is far above the "10 percent most traditional record labels offer."

Comparing an online music distributor to a traditional record label, however, is misleading. In exchange for the high percentage they make off CD sales, record companies fork out big bucks. They pay for a CD to be recorded, mixed, mastered and pressed and they pay to develop the artwork and promote the finished recording through established radio and print channels. By contrast, sites like MP3.com offer none of these services; they simply offer to sell a finished product.

Next page | Exposed to the elements