Spoiler: bands get about 20% of what the label gets. Your album can sell 1 million copies and your band might still owe the label $500,000. Labels take 10-20% off the top for breakage fees. Breakage. As in vinyl records that broke during shipping.
Yes, but that's for the recording/release/marketing/tours side. Royalties continue to be paid long after the production costs are covered. I imagine they should go 100% to the artist, but wouldn't be surprised if they don't.
That would be very interesting. Is this simply not a viable model without raising prices (in the case of Spotify) or are record execs really the fat-cats that we all think they are and would they be able to save themselves by simply being less greedy and taking out a smaller cut.
So, in ths example, assume a 10% amazon click through = 1 or 1 over the profit 2 of the original artist. Ratio of distribution cost to artist benefit = 4 to 1.
If a charity was run like this[1], it would probably be a crime.
Given the file/size quality needs for music (vs books), there is no justification for huge payouts to a long-chain of multi-lelevel marketers / middlemen.
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Edit: relevance
[1] A net payout at 20% of donations receipts for a non-profit, is generally considered dubious.
Looking back, ok but what about going forward? Tech is obviating the economic "function" of legacy music biz. The only thing proping them up is gov't monopoly rights. At some stage (of remediable innefficiency), it makes more sense to have an "art tax" and pay the artists directly. why should society pay functionaly usesless intermediaries 80 cents on the dollar? to duplicate files and send them over the intenet? Cmon. If an alternative (irs) can do this via taxes and NP foundations for 20 cents overhead, without reducing the artist production incentive? There dies the public policy argument supporting "recording" industry. It goes without saying that artists make all their money performing live and through sales of T-shirts. This would continue...Society is better off...No? Whats not to love. Spotify and soundcloud and you-tube et al could still have a role (they pre-suppose the existence of product in any event).
I agree that copyright and especially patent law is ridiculous these days and that the government propping up the music industry is wrong.
But my wider point was that the reason they capture so much value is because they're businessmen, that's what they do. It's not that society chose to pay them 80% or whatever, it's that they figured out how to make that money. If we kick out the foundations, the major labels, dinosaurs that they are, will crash and burn, but this won't lead to artists reaping the rewards, it will lead to new businessmen who spring up to figure out how to extract value from the new status quo.
All of this is to say that I don't think it's effective to measure what percentage artists end up as a proxy for the quality of the law. There are just too many ways to game that, and you know who's going to come out on top. Rather I think the original principles of copyrights need to be revisitied, and we consider only the maximum benefit to society, with the simple goal of having a richer culture. The question of "incentive" to create is especially slippery since it can never be tested, and the full-time lobbyists are all on the big content side. But the real problem is that the law is woefully out of date with regard to the ease of copying bits, and the value of a remix culture.
