Using Complex Copyright Law To Take Advantage Of Artists

By Jeff Price

The last article talked about how the old school music industry found a way to steal money of yours that you never even knew existed. This article describes how some companies use “slight of hand” and complex copyright law to take money from right under the artist’s nose.

Here’s how it works.  In the United States, each time a song is “reproduced,” the songwriter (not the record label) is legally required to be paid $0.091 (a little less than a dime) for something called a “mechanical royalty.”

As an example, a song bought and downloaded from iTunes (or any digital store) is legally considered to be a “reproduction,” therefore each and every time a song is downloaded from iTunes the person who wrote the song (meaning you, or someone else if you covered the song) must be paid the mechanical royalty of $0.091.

If the song is bought and downloaded from iTunes one thousand times, the person who wrote the song must be paid 1000 x $0.091: a total of $91.  Legal statute requires the songwriter to be paid this “mechanical royalty” for each and every reproduction (hence the “statutory” rate).

In the United States, music services like iTunes, AmazonMP3, etc. give the record label the money owed for the “mechanical royalty,” and the record label must account to and pay the songwriter.  Outside of the United States the “mechanical royalty” is paid to a third party collection agency where it sits until you get it. If you don’t get it, they give it to others.  (you can read more about that here )

For example, let’s say you cover the song “Let It Be” written by John Lennon and Paul McCartney.  You then put your recording of that song on iTunes U.S. and it sells one copy.  iTunes U.S. pays out $0.70 and then, depending on how you got your music on iTunes, you get some or all of it.   From the money you get from the sale of your recording from iTunes in the United States, $0.091 must be paid to Paul McCartney and John Lennon (they wrote the song) for the mechanical royalty (they split the $0.091 50/50 as they each “own” half the song).

If you wrote the song that sold, this $0.091 goes to you.  That’s the law.

So here’s the slight of hand trick some use: let’s say an artist uses a company that takes a percentage of the money from the sale of music to get into iTunes.  A copy of the artist’s recording sells in iTunes U.S., so iTunes U.S. pays out $0.70.  The company takes a percentage — let’s say 9% of the $0.70.  Guess what, they just took 9% of the money going to the record label and 9% of the money going to songwriter.

That’s illegal.  And I can assure you John and Paul did not approve of this company taking 9% of their mechanical royalty money.  The same holds true for you.  If you wrote a song and someone covers it and it sells, this company would be illegally taking 9% of your mechanical royalty.

Now this other company might say: “No, we did not touch the $0.091 owed to the songwriter, we only took 9% of the money owed to the record label.”

Really?

They took 9% of $0.70 but they tell you, the artist, they are only taking 9% of what the you as the record label make.  Therefore, the percentage this company is taking from the artist is either higher than the 9% they claimed, (in which case they are misrepresenting to the artist how much of his or her money they are taking), or they stole from the songwriter.

Which one is it?   Steal from the songwriter or misrepresent the percentage they are taking?

Once again, complex copyright law allows these companies to use financial slight of hand to either illegally take money from the songwriters or misrepresent to artists the percentage of their money they are taking.  And once again, the complexity of copyright law allows for someone to give with one hand and take it back with the other without your even knowing it.

This really needs to stop.  And frankly, why the hell don’t they take a moment to explain these laws and processes to artists? (for more on this, see the articles on how they steal your money and how they don’t tell  you what you get paid.)  Is it ignorance, purposeful or something else?  We all work for you!  This is our job. Without you, none of these services, TuneCore included, would have a business.  This music business can be transparent and honest, the only thing holding it back is that there are people in positions of power choosing to operate in secrecy or prey on the less educated.  Fortunately, this has no choice but to change as more and more information comes to light.  It was hard to scream thief when you didn’t see them stealing from you, now you can.

The purpose of TuneCore is to make the world better for artists, and it takes the power of you to make that happen.  The more you know: how your rights make you money, where that money sits, how much you are supposed to be paid, and what your six legal copyrights are, the faster it will happen. Combine this knowledge with the transparency and efficiency technology brings and no amount of misdirection or slight of hand will be able to stop you from seeing what’s actually happening.

And that’s when they finally get driven out of town.

————————————

AUTHORS NOTE ADDED July 20th at 9:50PM Eastern

As a few people are attempting to mislead readers of this article, I thought it best to provide the math:

a song sells for $0.99 in iTunes US
iTunes US pays out $.070
This service takes 9% of $0.70 = $0.063

That’s NOT 9% of “Your Money”.

(side note, sure hope they do not round up on you and take $0.07 or they would be lying again – in any event…)

The person that wrote the song (or the entity that controls the copyright) must get $0.091 for the “reproduction” of the song that occurred when there was a sale of the recording of the song.

If you covered the song “Let It Be”, you would owe the John/Paul $0.091 for the reproduction of the song when it was bought (not before it was bought).

Therefore, “your money” is not $0.70, your money is $0.70 – $0.091 = $0.609

They should only take 9% of $0.0609 NOT 9% of $0.70

But they take 9% of $0.70. Therefore the true % they take from you is 10.5%

If a song sells outside of the United States, the service only takes their 9% of the money owed to the label NOT 9% of the money owed to the label AND the songwriter.

Here is the math. Assume a song sells in iTunes in Germany. iTunes pays the label .68 Euros and the songwriter 0.021 Euros. They only take 9% of the .68 Euros.

Now lets go to the US.

iTunes pays the label $0.601 and the songwriter $0.091 but they take 9% of $0.70

So in the US the rate is over 10% whereas outside of the US their rate is actually the 9%

You tell me, since when does 10.5% equal 9%? Only in the old “screw the artist” industry

One last point, record labels in the US that use back-end model distributors have legal clauses in their agreements that state the distributor is only allowed to take a % of the record label share.

Jeff

  • MDK

    Thanks for the info!

  • Surfer Zen Rawk

    if Itunes is taking 30% and not paying the songwriters, then they are stealing from songwriters too?

    • Anonymous

      @surfer zen rawk

      (love the name!)

      THe key difference is this – iTunes is like Tower Records, WalMart etc. That is, they must pay a flat wholesale rate for each unit sold. For example, Tower Records bought a CD for $10 and sold it for $17.98

      iTunes buys music for $0.70 and sells it for $0.99. Any retailer can sell their merchandise for whatever price they want, you cannot control this. If you did it would be price fixing

      It is understood by the person giving the inventory to Tower Records that they are responsible for paying the mechanical royalty

      It is not understood by musicians that use companies that take a % of the sale from the music in iTunes that the company is taking a % of the songwriter AND label money, not just of the label money, and yet they state they are only taking 9% of this artist’s money. They are not, they are taking higher than 9% due to their slight of hand

      They just misrepresented the truth to you.

      how are you supposed to know how much you are actually owed with this type of stuff going on?

      • Somedude

        You are supposed to know how much you are owed if you’re the songwriter because it’s 9.1 cents per song. Doesn’t get any more straight-forward then that. Pricing does not change the royalty whatsoever. There are many complexities to Copyright law, however the issue you’re discussing is something else entirely.

        If you want to complain about price fixing or how retailers/distributors operate, I’m all for it. But attempting to bring songwriter royalties into the mix just waters down your argument.

        • Anonymous

          @somedude

          its not about price fixing – this answer is in response to what is the difference between iTunes and a company that takes a % of the money from the sale of the music

          it needs context – i wish it was simpler to explain, it is not

  • Lbstout123

    But wait. You’re guilty of blurring the information too. It doesn’t matter what “cut” a third party aggregator gets, the rate for mechanicals — by your own explanation — stays the same $.91. Whether the aggregator takes 1% or 50%, the mechanical rate is still… $.91. It’s a static penny rate, not affected by anyone else’s %. And, by way of clarification, it’s NOT automatically the songwriter who is owed the mechanical rate, but the copyright holder(s) — this may or may not be the songwriter. 

    Tunecore takes its own hefty $50/album/year, so you get your cut too. Each person posting an album has to do the math based on % compared to the flat annual rate/album. Sometimes the % is a better deal. I’d love to see more non-biased apples to apples comparisons on all the costs or third party sites, OR I’d love to see iTunes become its own aggregator. 

    • Anonymous

      @lbstout

      If a company states they say they are only taking 9% of the your money, they they should only take 9% of their money, plain and simple. they are not. They either knowingly lied to you or they are clueless (in which case, why in the world would you want people that are clueless to work for you).

      Good luck understanding what you get with someone else that has to misrepresent the truth to you in order to get your business.

      Jeff

      • Lbstout123

        I agree with many of the other writers here: you’re not doing the math. It’s self-serving drivel and it’s illogical. Please stop it. 

        While I chose Tunecore because a year ago you seemed like the least evil. Now that the annual fees are starting to roll in, I’m not so sure. I understand the $50/album/year to set up an album, but charging the same to maintain the album seems way too high (I don’t remember that being clearly spelled out last year, so don’t talk to me about hidden fees). I could understand a small maintenance fee, but the same as to set it up? Seems just as sneaky/greedy as the folks you’re accusing of charging onerous %’s. 

        This makes me want to check out other aggregators — anyone have experience with ReVerbNation? 

        • Anonymous

          @lbstout

          I could not find you in our database, are you actually a customer of TuneCore’s? Your comments appear to be made up and are attempting to discredit a company that you dont like.

          If you don’t agree with TuneCore’s transparency and flat rates so be it. You have every right to do what you want with you money and rights. But at least have the person taking your money be honest with you.

          So how are they ripping you off? Lets go to a company that claims it is taking, lets say, 9%

          Now lets run the math

          a song sells for $0.99 in iTunes US
          iTunes US pays out $.070
          This service takes 9% of $0.70 = $0.063

          That’s NOT 9% of “Your Money”.

          (side note, sure hope they do not round up on you and take $0.07 or they would lying again – in any event…)

          The person that wrote the song (or the entity that controls the copyright) must get $0.091 for the “reproduction” of the song that occurred when there was a sale of the recording of the song.

          If you covered the song “Let It Be”, you would owe the John/Paul $0.091 for the reproduction of the song when it was bought (not before it was bought).

          Therefore, “your money” is not $0.70, your money is $0.70 – $0.091 = $0.609

          They should only take 9% of $0.0609 NOT 9% of $0.70

          But they take 9% of $0.70. Therefore the true % they take from you is 10.5%

          Look at that, they squeezed an extra 1.5% of your money out of you without you even knowing it

          Now if you think I am “splitting” hairs, let me ask you another question, how come they do not do this VERY SAME THING on sales of the recording outside of the United States?

          If a song sells outside of the United States, the service only takes their 9% of the money owed to the label NOT 9% of the money owed to the label AND the songwriter.

          Want a hard math example? Assume a song sells in iTunes in Germany. iTunes pays the label .68 Euros and the songwriter 0.021 Euros. They only take 9% of the .68 Euros.

          Now lets go to the US.

          iTunes pays the label $0.601 and the songwriter $0.091 but they take 9% of $0.70

          So in the US the rate is over 10% whereas outside of the US their rate is actually the 9%

          You tell me, since when does 10.5% equal 9%? Only in the old “screw the artist” industry

          Want another example, record labels in the US that use back-end model distributors have legal clauses in their agreements that state the distributor is only allowed to take a % of the record label share. Perhaps they are wrong as well?

          Why would this deceptive practice be acceptable to you? Should they not be honest as opposed to just using your lack of copyright law to take more of your money? What in the world is wrong with transparency?

          Its not right that they use your lack of knowledge of copyright law to squeeze another 1% from your. That’s just wrong.

          Jeff

  • John Nickell

    You told us how they do it. Now tell us how to stop it! And is there a list of bad companies to watch out for? You should post one and follow up with music protection bills to congress through the Unions or BMI or ASCAP.

    • Anonymous

      @john

      we are going to create a way to stop this. First, check out this – http://www.tunecore.com/store/product/102

      next, stay tuned for the new service that protects and works for songwriters

      sounds corny, but together, we can actually change the world.

      jeff

  • Benfillion

    The way this article is written is confusing.  Especially when it comes to the section about the slight of hand.  It sounds like you are using the term artist to refer to the songwriter at certain points.

       Also, when you say this —> “The company takes a percentage — let’s say 9% of the $0.70.  Guess what,
    they just took 9% of the money going to the record label and 9% of the
    money going to songwriter.”  it sounds like you are saying that the distribution companies are somehow taking the 9% of the mechanical license fees. 

    I don’t think that is really the case though.  Because they are paying the whole lump sum amount of revenue resulting from purchases directly to the recorded music owners, “recording artists or labels”, it is the recorded music owner’s responsibility to pay the underlying composition copyright holder’s mechanical royalty fee (i.e. the label or independent artist pays the songwriter).  Therefore, I really don’t see how it is the distributors fault.

    To me this sounds a little like sensationalist journalism intended to glorify TuneCore and make its users feel indebted to TuneCore. 

    -Ben
    p.s. please correct me if I’m wrong, I think I just had a hard time understanding what you were actually saying because of the language you were using.

    • Anonymous

      @ben

      first, my agenda is this – create transparency, provide information, allow the artist to make a decision based on the truth. How hard is that? Seriously? Why do people need to keep lying or misrepresenting information to artists?

      I understand this stuff can be confusing, let me give you a simple example

      A service says – HI ARTIST – WE ONLY TAKE 9% OF YOUR MONEY WHEN IT SELLS IN ITUNES.

      Now lets run the math

      a song sells for $0.99 in iTunes US
      iTunes US pays out $.070
      This service takes 9% of $0.70 = $0.063

      That’s NOT 9% of “Your Money”.

      (side note, sure hope they do not round up on you and take $0.07 or they would lying again – in any event…)

      The person that wrote the song must get $0.091 for the sale of the recording of the song.

      If you covered the song “Let It Be”, you would owe the John/Paul $0.091 for the reproduction of the song when it was bought (not before it was bought).

      Therefore, “your money” is not $0.70, your money is $0.70 – $0.091 = $0.609

      So they should only take 9% of $0.0609 NOT 9% of $0.70

      But they take 9% of $0.70. Therefore the true % they take from you is 10.5%

      Look at that, they squeezed an extra 1.5% of your money out of you without you even knowing it

      And it does not matter if John/Paul wrote the song or if you wrote the song – you are treated the same as John/Paul.

      If you wrote your own song, and the recording of the song sold, you (just like John and Paul) are owed the $0.091

      Now if you think I am “splitting” hairs, let me ask you another question, how come they do not do this VERY SAME THING on sales of the recording outside of the United States?

      If a song sells outside of the United States, the service ONLY gets the money owed to the label NOT the songwriter. And the service only takes their 9% of the money owed to the label NOT 9% of the money owed to the label and songwriter.

      So in the US the rate is over 10% whereas outside of the US their rate is actually the 9%

      You tell me, since when does 10.5% equal 9%? Only in the old “screw the artist” industry

      jeff

      • Benfillion

        Ohh ok I understand what you were trying to say before.  Well then this really only seems to be an issue for recording artists who are distributing cover songs.  Anyways, I think any intelligent artist would understand that the $0.091 isn’t really their money to begin with, it is the fee they are paying to have the right to record the song they didn’t write.  I wouldn’t be against distributor stating that for cover songs they take 9% of $0.609, due to the fact that a mechanical or compulsory license has to be obtained from the songwriter, publisher or their PRO for the right to record the song, though.  I’m glad this whole mix up was cleared up.

        • Anonymous

          @benfillion

          the issue is not about cover songs, its they say they are only taking 9% and of your money and they are taking over 10% in the US. They just flat our misrepresented the truth to you and they know it.

          Be it your, or John Lennon, they cannot take your money

          As an example, if you wrote a song and recorded it and it sells outside of the US, they take 9% for the money owed to the label

          In the US, for the very same song, they take 9% of the money owed to the label + songwriter (that’s you)

          In other words, they used slight of hand to squeeze another 1% from you without you even noticing.

          • Matt

            It would be good to have some pie charts showing the different scenarios reguarding music copyright and royalties US / non US ect. As they say “a picture saves a thousand words” as well as a lot of confusion for people who are not very familiar with copyright law. Not to mention your time trying to explain it :)

          • Anonymous

            Now that is a good idea. I’ll see what I can come up with

            Thank You

            Jeff

  • Somedude

    Agreed with Ben. Nothing after this section “If you wrote the song that sold, this $0.091 goes to you.  That’s the law.” has anything to do with Copyright Law. This article should be entitled “A brief explanation of Copyright Law, followed by some whining about middle-men taking a cut”. Songwriters get their 0.091 regardless of who’s getting a cut of what or how much something is sold for. 

    • Anonymous

      correct

      if there is a legal “reproduction” of a song, the songwriter (or other entity that controls the copyright if there was a transfer of rights) is owed a mechanical royalty – the current rate in the US is $0.091 (if under five minutes).

      This money is owed to the songwriter (or other entity that controls the copyright) for the reproduction. If you wrote the song, and control the copyright, you are required by law to be paid.

  • Marti Mike

    This was an amazing article, SO gthis article is intended to flag others and as a previous commentornoted, “glorify tunecore” and leave us as artists feeling indebted. Interesting….

    • Anonymous

      @marti

      sorry Marti, you going to have to really explain to me how telling an artist they are getting screwed is a bad thing

      So many cynics in the world – better no one should tell artists anything and keep them in the dark?

      What is your agenda with this comment?

      Are you using another service?

  • SK

    Complete and utter propaganda overflowing with feigned ‘righteous indignation’, this is yet another (not-so-cleverly) veiled article designed to attack Tunecore’s main competitor, CD Baby. “These companies” who “take 9%”? C’mon Jeff! At least try to be subtle. And by the way, it’s “sleight” of hand, not “slight”. 

    I have projects currently through both distributors, and neither one is perfect. Best thing I like about CD Baby? They actually pay out for iTunes the next month, not 45 days later. I can set my clock to when I can expect a deposit from CD Baby every month (usually the last Monday of each month I get paid for the previous months’ sales, and it’s been that way going on 3 years now), but not with Tunecore. That being said, I do disagree with the 9% cut CD Baby takes. It’s obvious it’s a part of an older model that doesn’t seem fair anymore. Then again, given the average $$ made by Tunecore artists last year, their recent annual storage fee hike from $19.95/year to $49.95/year isn’t exactly “fair” either. Especially not when the justification such an exorbitant increase was a laundry list of updated “features” which should already be standard in the first place. 

    But Tunecore’s method of introducing the price upgrade was dirty in itself. My account was one of many that got charged automatically for renewal at the new rate, even though I signed up under the terms that stated it would be $19.95/year. I had already decided not to renew that specific project, and all the reminder emails Tunecore sent out stated that if I did nothing, the project would be removed from all the stores. So I let it sit, and did nothing. But that didn’t stop Tunecore from auto-renewing and taking $49.99 out of my balance 3 days before the project was scheduled to be removed. That is typical dishonest business practice. Auto-renew 1 million people, and see how many are too lazy or preoccupied to actually send an email protesting and requesting a refund. All I’m saying is, be careful folks. Tunecore is just like the rest. And they are just like any other company who gets it in their head that just because they’ve created the perception that they are the new market leader in their industry, they can do whatever they want (like introduce huge price increases) and not give a sh*t about their customers (I’m lookig’ at you, too, Netflix).

    And Jeff, if you want to bring more legitimacy to your company and really revolutionize digital music distribution for independent artists, then take a few moments (I dunno, maybe just 60 seconds?) and think about something other than how you can make yourself another million. For instance, think about those of us who can’t find a job in a broken economy, who subsist solely (for the current time being, yet again) on our music (I made $10,569 last year, 8k of which came from digital downloads) and come up with things that really matter most to us. 

    One thing would be getting paid as soon as Tunecore does (and not having you hold on to our money for weeks while you pocket the interest). Not only would that be better for us as artists, but you’d be helping yourself and your “company” as well by nailing yet one more greedy nail into CD Baby’s infantile coffin (this is how you put them out of business, by the way… figure out what they do right, or, I know it’s painful to say it but … what they are doing “better”, and do it, too… oh and stop all this propaganda). 

    I’ve got other more noteworthy ideas for you, but you’d have to pay me for them. But seriously, chill out with the CD Baby hate letters. They’ll end up just like Blockbuster. It’s only a matter of time. What Tunecore needs to focus on is being a cool cat. Talk about that in your next staff meeting. How can Tunecore be the “cool cat” of digital distribution?

    And do tell.

    • Anonymous

      @sk

      I almost appreciate what you posted until you started with silly baseless accusations and false facts. You accuse TuneCore of propaganda? Are you kidding me? Seriously?

      I have a live webcast tomorrow, feel free to show up and ask questions, i would love to discuss these very issues with you. Seriously, you brought this to our website and blog, you are more than welcome.

      No subtly about it, others are flat out misrepresenting the truth to artists and it makes me sick. I am going to do everything I can to educate to let people understand how and why.

      So lets start with your false statements:

      The 2nd and 4th tuesday of each month – yes, twice a month – all received info and money posts to TuneCore Artists accounts where it is instantly available to withdraw 24/7 via direct deposit into their bank account, PayPal or paper check. They can send out payments to whomever they like within their own account.

      Next, when you log into your account, you can run custom reports, want to see what type? Click here to watch – http://www.youtube.com/watch?v=24aiQRP9mKw

      Next, so let ask you SK, how many decimals to the right does you CD Baby accounting go. I suspect very strongly it goes two places to the right and they just skim off the rest of your money.

      At TuneCore, not a chance in hell we will do that. When you log in you can see up to 30 places to the right of a decimal point because we wont, nor will we ever, round up or down and steal your money. I don’t care if its a fraction of a cent, I just wont do it.

      How about every single statement archived for you to download at will whenever you want. Just log in and click a button.

      Seems to me like you need a new watch….

      In regards to “fair” – for me fair is being TRANSPARENT. There is nothing hidden at TuneCore. No charging you $20 for a barcode and UPC that is free, no charging you for artwork that we provide if you want, no hidden anything. Its simple, its clean and it does what it says it does they way it says it does it.

      TuneCore is the best in the world at what it does and will continue to be so. It is the best in class, honest, transparent and if you truly believe the cost of a few beers and pepperoni pizza is worth more than having the best company in the world work for an represent you, your music and your copyright, there is nothing I can do about that.

      What is this “just like everybody else” crap? I think I can understand why you say that, as you have only worked with companies that have lied, misrepresented or screwed you over. I would feel the same way. The good news is not everyone is out go get you, I promise. Is the world perfect, no. But geeze, give it a moment, we are changing a 100 year old 30 billion dollar industry.

      In regards to the renewal – you TOLD US to auto renew you. As you pointed out, after you told us to auto renew you, you did “nothing”. Well, forgive me for this but we are good, but we are not that good. If you did not want us to renew your release you have to tell us.

      In regards to my “millions”, do you just make this stuff up? Where in the world do you get this crap from? I am truly sorry you are not happy, but do you have to attack me to make yourself feel better? What in the world did TuneCore do to you aside from give you the option of getting your music into iTunes etc while keeping all your rights and getting all your money?

      You want to know how TuneCore could have made millions? It could have down what your beloved CD Baby did, charged you an up front fee, taken a % of your money when your music sold on-line and misrepresented what it takes from you. That would do it.

      jeff

      • SK

        The quick-tempered way in which you respond to all of our replies, however misinformed or “silly” they may be, offers a key insight into your personality and approach to doing business.

        If you want to be transparent, then just be transparent! My whole point which you failed to respond to is that there is no need to attack CD Baby. A company or individual’s reputation will and does speak for itself. And yes I called it ‘propaganda’ as a way of making a similar point right back to you that big, scary words and statements do little to actually educate folks and more to cause confusion and misdirection.

        The just like everybody else crap is that Tunecore is a business motivated by dollars and PROFIT just like everybody else. Simple as that.

        And no, I did not tell you to renew my project. Every reminder email I got (as I said before) said it would be removed from all stores if I did nothing. Here’s the exact quote from one of 3 reminder emails:

        “If you do not renew, your release will be taken down from the online stores after the renewal date.”

         I understand there is supposedly a setting in my ‘preferences’ that says something about auto-renewing, but I searched and searched your interface (which you know is still not perfect) and could not find an option to even specify such a thing, much less change it. It does not, however, matter at this point as you did process a refund and ultimately took care of the issue. Kudos for that at least.

        You didn’t make a million bucks last year? I really did just assume that one. Well maybe I should have how to make “your first million”. Well, again, maybe it seemed like a personal attack, but you still miss the point. The point is, we are the little guys. No matter how much you go on and on about how wonderful you think your service is, our opinion about that forms through the experience of actually using it. I don’t see how allowing yourself to appear as the pompous, thin-skinned CEO type is doing you any good whatsoever. 

        People flame and spew BS in online forums all the time, that’s nothing new. And some of us share legitimate points of view, even if we do seem upset. I don’t know, you could actually be a nice guy at heart, but you have to admit your own perspective has become skewed in the years since you started this. Do you really know or even care about what it’s like to experience a phenomenon like Tunecore from the artists’ perspective? Sure, your default answer is “duh, of course I do.” But I mean, do you think about daunting all of it really is (especially to noobs)? 

        In all seriousness (and dare I mention transparency again), you seem more focused on putting your competition out of business than anything else. That’s what the tone of this and other past articles indicate to me. And that is completely understandable in the business world. All I’m saying is, if you’re going to go after their throat, do it honorably. The approach in this article is a bit below the belt and you know that. But whatever works, I guess.

        I will continue using Tunecore because you actually do most of the basic stuff right, and you do seem to constantly be improving your service. But I know what you know, and that is that if an album makes less than approximately $555 annually, then the 9% cut that CD Baby takes ends up being a better long-term deal than your $49.99 (not counting their initial $35 setup fee of course). And since such a large number of albums make less than $555 a year, you’re looking a large group of CD Baby’s customer base that has no interest in migrating over. Why pay you $49.99 when they pay CD Baby less? All the mathematical breakdowns in the world aren’t going to help them change their mind. 

        There are other ways though.

        Thanks for at least attempting to engage your customers, Jeff. That’s also leaps and bounds above the other guy.

        Take care,

        SK

        • SK

          And I should have said, all the cheap shots you keep taking at CD Baby aren’t going to help them change their mind, either. It just makes you look like a bully. 

          • Anonymous

            @SK

            someone has to take on the bullies in this industry. It’s time to fight back. Enough is enough.

            CD Baby’s customer, or anyone else’s, need to know the truth.

            My goal is not to “win” customers, my goal is to get information out thereby allowing artists to make decisions based on accurate and true information.

            You seem to forget, it was not too long ago that TuneCore had no customers and CD Baby was bought for over $20 million dollars.

            In some ways, its flattering that you think of us as “the man”, it means we had an impact and were able to change things.

            jeff

        • Anonymous

          @SK

          I do understand that in a discussion, you appear to occasionally use a a diversionary tactic of attacking the person and name calling as opposed to discussing the issue as . So be it, you are who you are and I am not going to change that.

          But may I suggest we cut to the chase – when I see people getting screwed. I dont care if its someone being attacked in a park, getting beat up or someone trying to screw an artist, I get involved.

          The point remains, artists are getting screwed by a back-end model, particularly when the entity that is taking the back-end misrepresents what % they are taking. If you want to specifically call out CD Baby you go right ahead, I’ll back you up.

          But my statement goes beyond that one company, its all of the companies that work in that manner. It’s why I started TuneCore; to right a wrong. Do I want to change the world to make it better for musicians, you bet I do. And I’ll fight tooth and nail to do it.

          Should I be silent if I see a PRO, a label, a back-end company screwing an artist, absolutely not. Get involved, have a voice, make a difference. I suppose I could have only posted blog articles, but I decided to take it a step further and actually do something to change things, I started TuneCore.

          And no amount of threats, name calling or attacks is going to stop me from pursuing the dream of changing things for the better – TuneCore is my “song”, and I believe in it heart and soul.

          So tell me SK, why can’t they be honest? Why manipulate? Why not just be open and transparent? And what’s wrong with pointing it out? Perhaps we should all just keep it to ourselves and not spread the info?

          In regards to your release renewing, your preferences have you auto renewing. You could have at any time changed them, you could have contacted us by phone or email and asked for that not to happen. Any TuneCore customer can at any time. And if you had contacted us post being charged, you can bet you would have had your money returned. If thats still the case, contact us, you will get refunded. If you were not aware of this then we need to try even harder to make sure you have that info.

          In regards to the “million bucks”? I think I understand what you are trying to do: you are trying to portray me personally as someone that makes money, and a lot of it, via TuneCore to discredit me and undermine our business. Is, this is your attack on TuneCore? A made up salary for me?

          SK, I mean this will all sincerity, may I suggest there are better things to do with your time than make up things about people’s income and call them names on their blog.

          If you would like to use a back-end company as you feel its a better fit, you should do so. But despite my disagreements with you, I will still fight on your behalf to make certain that that company is not misrepresenting what they take from you.

          You, and all artists, deserve clear and concise information and transparency so you can make the decisions right for you.

          I want TuneCore to be the right fit for everyone, but it wont be. But in the event you decide we are the right fit, we will be here and do what we say, the way we say and do it better than anyone else.

          Promise.

          jeff

          • SK

            No Jeff, I’m not trying to portray you as anything. You do a fine job portraying yourself as what you are, which is open to each individual’s interpretation. 

            I was simply pointing out the fact, whether you will acknowledge it or not, that you have an extreme disconnect from the artist on certain levels. 

            The issue here is not about a “better fit”. The best fit would be for iTunes to start negotiating with unsigned artists and cut all of you out entirely, but we know that will never work. As for one option that actually would be better, if iTunes didn’t control such a hefty market share in downloads, is Bandcamp. And no I don’t work for them (quit being paranoid), I have several of my projects up on their site, and when the time comes that buying music from Bandcamp becomes more of the norm for consumers and everyone gets sick of drinking the Apple kool-aid, I will use it exclusively. Talk about transparency.

            As for CD Baby and other competitors (as well as anyone else who dares reply with an opinion different than yours, apparently), you act as if they are inherently evil, lying to their customers on purpose, intentionally trying to “screw them over”. In reality, they just have an old back-end model, like you say, that is broken and failing. And making a change is not as easy as you make it sound. What worked before isn’t going to always work, and they’ll either figure that out or they will lose. Simple as that. No need to demonize them, or me, or the others who responded to this article.

            But at the minimum, you should definitely keep doing what you’re doing, waving the Tunecore banner high and proud. It’s what you’re meant to do and I’m not protesting that. My true feeling is, “more power to you”. Just don’t let that “power” consume you, and don’t allow it to hurt others. 

            Do you think that is possible? 

          • Anonymous

            @sk

            It’s been 17 years of running a label and just about six years of running TuneCore. The major thing I learned over the years is most things in the music industry are done with full knowledge of the label/distributor.

            The back-end model companies are absolutely aware that outside of the US the % they take is off the money owed only to the label while in the % they take is off the money owed to the label + the songwriter.

            They honest to god do know the % they say they are taking is not what they say. They know they are misrepresenting things to the artist as label but make a conscious choiche to do so and it’s wrong.

            That’s where this article is coming from. That’s why I am angry. How hard would it be to be honest, open and transparent?

            This is not about me, it’s about changing a system. The only “power” I have comes from all of you choosing to use TuneCore. And the only way we can truly change things is with trust.

            jeff

    • Gerardo

      I appreciate your help.Can I sue them or something so we can get some money?the money that they owe me or even more money for us?I understand that I have to do something about this.Thanks for your help and dedication to your job.Please get back to me asap.

      • Anonymous

        @gerarado

        I would ask them about it. Point out that they only take a % of the label income outside of the US but in the US they take a % of the income of the label + songwriter income.

        See what they say…

    • Sam

      You made $8000 in digital downloads last year and are complaining about a $30 annual price increase?  Yeah, okay, totally believable.

  • Dvon

    Not quite sure about where all the money goes in the article, neither have I released or posted an album anywhere or on tune core.  But, from shopping around for distributors and music sites that help you get your music out there, posted or released, tune core seems to be about the best in its handling of an artist and their songs/music if they live up to and honor what they say!  I find the article very informative, but a little confusing at times.  Even though it may shine a little light on tune core, it has shined a light on a criminal practice that goes all the way back to blues, gospel and rock artists in the 40’s, 50’s, and 60’s who never even had a clue!  At least now I have a clue!

  • Curt Brewer

    I will say that one of the problems with the music business is with the artist. 

    Artists many times will reproduce the song/album themselves. In return they keep all the payments for product sold. 

    Artists, this is also stealing.

    Stealing from the songwriter.
    Stealing from the investor(s).If you are an artists, YOU MUST be accountable for your actions also.

    • Anonymous

      @curt

      you are right. The law requires the songwriter to be paid for each reproduction.

  • Reub

    Lbstout123 seems like you are being exposed here and you are fighting to protect the little dirty secret.

  • Aaron Poehler

    This was a poorly put-together piece all around.

    • Anonymous

      @arron

      sorry, you are going to have to explain to me how a company that states they take, lets say, 9% from you and they take 10% is not something worth mentioning?

  • tunecoreuser

    “The company takes a percentage — let’s say 9% of the $0.70.  Guess what, they just took 9%” “That’s illegal.” Well, I don’t know the company you’re refering to but having an additional 9% taken per track would suck but all of these companies, just like tunecore, charge us a yearly fee per track and per album. Up to 59.95 a year. Which we have to make back before making a dime. So maybe it’s all the same in the end to us artists. 9% or not.

    • Anonymous

      @tunecoreuser

      cant seem to find you in our system – are you actually a TuneCore customer?

      But lets get to the point – why do some services have to misrepresent and/or lie to you. If they say they take 9%, then they should take 9%, not 10.5%.

      How in the world are you supposed to make educated choices if people wont tell you the facts?

      If you choose to give you up your money to someone else, that’s your choiche, but shouldn’t you know how much they are taking?

      why cant they just be honest?

      jeff

  • http://www.jeffdolan.com Jeff Dolan

    Jeff, Thanks for fighting the good fight.

    I’m not sure what other music CEO writes and speaks out so much for indie artists, and who replies with so much passion to his comments (most of which don’t even use real names or links)! There are plenty of folks that gladly pay the clear upfront fees and appreciate all the work going into TuneCore.

    Keep doing what you are doing.

    • Anonymous

      @jeff

      thank you for the support and kind words, i truly do appreciate it. Usually when we post we have employees from other companies come to our blog and attempt to discredit us.

      I decided to let these comments stay up on our blog as I believe everyone is entitled to their opinion, its just when they make up facts I get annoyed

      My true hope is to provide opportunity, information and complete and total transparency

      with that information it truly will come down to the best service winning.

      Jeff

  • Chad

    How many artists on Tunecore don’t even sell enough downloads to break even from the set up fee charged? The splits on who is getting what don’t matter if you are not even making back the initial investment. Artists are paying companies like Tunecore and CDbaby to provide a service, that hopefully helps them make money.  Indie artists do everything themselves and most write their own music, so the artist, label and songwriter are all one. Major label artists have all of the mechanicals spelled out or taken away in huge contracts, and usually the full royalty rate is negotiated down, just so the label will cut the song.

    • Anonymous

      @chad

      another non-TuneCore Artist attempting to shift the conversation

      Hey Chad, here’s a question for you – would you rather have all the information you need to make your own choiche, full transparency, honesty and accountability or would you rather be lied to?

      Its simple with TuneCore – we charge a flat rate. We do what we do the way we say and you get exactly what you pay for. You know exactly how much you make and what to expect. You can try to change the conversation and claim that the cost of a few beers and a pepperoni pizza is not worth worldwide distribution, keeping all your rights, getting all your money, having a team of people working and fighting for you, but I simply dont agree.

      There should be no surprises, no tricks, no taking advantage of an artist

      Transparency, clarity and knowledge allow for artists to make decisions that work for them.

      Why trick them?

      For me, thats what this is about. Transparency. You can go back to the old back-end model where they can pull rabbits out of their hat in an attempt to distract you from what they are doing, where they screw you with accounting statements, where they trim off and round down your money or you can go to a service where it is not only simple and clear, but the best in the world at what it does.

      We are here for you when you are ready for us.

      jeff

  • Joe

    I run a very small indie label- mainly vinyl, but we also use tunecore for all our digital. We pay the set up fees and maintenance fees and pay all our bands monthly a set percentage of the money that comes in from tunecore (much more than .091 cents per track). While I think your article was aiming toward other aggregators, it can also read as an accusation that small labels like us are trying to pull one over on our artists because we haven’t spelled out that the band cut (which is much larger than ours) includes this portion. Can you clarify? Also, the hike from the 20$ per year maintenance to $50 may not mean much to some, it essentially makes some of our less popular bands earlier albums a net loss on our end. Take that for what it is. I know many would like to think that labels are a thing of the past, but I think our bands would disagree. We handle getting the bands new listeners, spend countless hours after our day jobs promoting the bands and working on their releases and many people look to our label when they want to discover new bands after becoming fans of our other bands (and for the record, we’ve dumped every cent we’ve made back into the label/bands for years. We aren’t trying to con our bands out of any money.

    • Anonymous

      @ Joe

      My issue is with back-end digital distribution companies (or any company) using complex copyright law as a way to screw one of their customers – be it a label or an artist

      The label/artist should know what they are paying for a service, not be told one thing and billed and charged another. If someone says they take 9%, they should take 9%, not 10.5%. If someone says its a flat rate of $49.99, it should be $49.99. How else can you expect to run a business? Not to mention the moral issue of screwing someone because you can. I have no idea what your contracts with your artists are like and have to assume, based on your posting, that you operate with integrity and honesty.

      in regards to our flat rate – I ran a label for 17 years. I would have KILLED to know up front what my costs were each year for distribution before i released a single album. I could have planned out my entire business operation better knowing exactly what my costs were ahead of time.

      My goal for TuneCore is to provide exactly what we say we will in the way we say we will. You get the service you deserve in the exact way you expect and have the best distribution company in the world working for you. From hunting down people around the world to get your money to protecting your copyrights to providing a top end world class accounting system that provides total transparency and 24/7 access to your money (I can’t tell you how many thousands of of dollars used to be spent to hire accountants or bookkeepers to run accounting statements!) we work for you.

      Jeff

  • SK

    Oh, C’mon Jeff!

     “As a few people are attempting to mislead readers of this article, I thought it best to provide the math” – Seriously?Why do you insist on demonizing everyone who disagrees with or questions you? Just because someone states an opinion in reaction to what they perceive as a biased article written by you, the CEO of Tunecore, in an effort to discredit your competitors, does not mean they are “attempting to mislead” readers. If anything, we could all say the same about you posting these types of articles in the first place. 

    To quote CD Baby’s site directly: 

    “We keep 9% of the net income paid to us by our partners and you keep the rest.”

    I don’t read any misdirection into that, it simply says 9% of net income. Whether or not an artist covers a song is entirely the artist’s decision and therefore their obligation to handle paying the statutory royalty fees if they choose to do so (currently 9.1 cents per song under 5 minutes in length). You can’t cover someone else’s song without paying the songwriter. 

    It’s totally and completely your OPINION (which you project quite vehemently) that it should only be 9% of 60.9 cents per song instead of 9% of 70 cents. The bottom line is, cover song royalties don’t even enter the picture here, and that is true for Tunecore as well. CD Baby, just like Tunecore, leaves it to the artist to handle their own royalty payments to publishers. What they advertise is 9% of net income. It’s right there in black-and-white. iTunes pays CD Baby 70 cents per download, which is the same as what they pay Tunecore. That is the same “net income” for both of you. 

    If you want to get people to see Tunecore as the better option, stop using your clout as CEO to mix things up and ultimately mislead the general, unsuspecting public, and stick to the facts. 

    Tunecore is a better distribution service because ____________. That’s all you have to do.

    Besides, I think you should find a way to co-exist with your competitors instead of spreading mis-truths about them. That’s just good business. Your services are actually quite different, despite having a lot of similarities. Last time I checked, Tunecore doesn’t offer physical CD/Vinyl distribution. Or CD replication. So let them do what they do and Tunecore can do what it does. 

    To be honest, the reason I feel a bit burned is because of the gigantic price hike from $19.95 to $49.95 a year. I was poised and ready to migrate 3 projects to Tunecore that I currently have distributed through CD Baby, because it seemed like a better deal, and I had tested Tunecore’s service with 1 new project this past year. My experience was a positive one right up until the changes you made, which took place within the month prior to my renewal date. 

    It’s all about the numbers, and no amount of explaining the new features, etc. is going to take away the way you made thousands of artists “feel” when you sprung that on everyone. You had all these people who were expecting to renew their projects at the $19.95 rate, and it’s as if you had spent months running numbers trying to figure out just how much money you could make by increasing the renewal fee on your existing base of customers already in the system! I know that’s not the only logic that led to the change, but I’m sure it was a part of the overall picture.

    Many, many people think it was a cheap, dirty thing to do. I am not the only one. Send out a poll to your customer base. A simple survey that asks what everyone thinks of the new upgrades vs. the price and you will find out for yourself. But you won’t do that, because it doesn’t matter to you, does it? It does not matter to you what the little guys think. As long as you get your $50/year out of each of us, you’ve made you and the board happy.

    SK

    • Anonymous

      @sk

      I agree, TuneCore is a much better distribution service. AND, back-end models are misrepresenting the % they are taking from their customers.

      Why is beyond me, they just need to be honest

      The back-end model companies are absolutely aware that outside of the US the % they take is off the money owed only to the label while in the % they take is off the money owed to the label + the songwriter.

      They honest to god do know the % they say they are taking is not what they say. They know they are misrepresenting things to the artist as label but make a conscious choiche to do so and it’s wrong.

      No amount of “come one” etc is going to change that.

      Be honest, transparent, tell the truth. Don’t misrepresent the truth and use your nuanced knowledge of copyright law to screw someone.

      How hard is that?

      jeff

  • Bomber

    I don’t think most companies are deliberately setting out to rip off artists, it’s more likely ignorance than malice. I’ve certainly found most of Tunecore’s staff to have large holes in their knowledge on this kind of thing.

    On another note.. $49.95 annual maintenance fee IS a rip off and I will be moving our label to  Emubands as each album comes up for renewal.

    • Anonymous

      @bomber

      I disagree, its not ignorance, its deliberate. They know full well what they are doing.

      Give with the right hand take with the left

      In the event you choose to continue to work with us, we will be here.

      jeff

    • Anonymous

      @bomber

      I disagree, its not ignorance, its deliberate. They know full well what they are doing.

      Give with the right hand take with the left

      In the event you choose to continue to work with us, we will be here.

      jeff

    • Anonymous

      @bomber

      I disagree, its not ignorance, its deliberate. They know full well what they are doing.

      Give with the right hand take with the left

      In the event you choose to continue to work with us, we will be here.

      jeff

  • Michael Nind

    This scenario is a total nightmare there are so many ways a record company can rip you of with out knowing it, Iam in a situation at the moment trying to obtain royalties owed by a band who put out an album on you tube with one of my songs on their album claiming it to be theirs having registered it with the PRS and because the track was released in the USA It was registered with ASCAP..there are so many collection agencys enabling royalties to slip through the net . Uniformity through out the world regarding copy write needs to be seriously investigated and a global solution on the lines of fair trade conformity.
    BEST REGARDS MIKE Nind /state secret.

  • Matt

    Do you really think using “Let it be” is a good example to use when talking about changing the system :) Not a Freudian slip I hope :) Just keeping you on your toes :) Next round ding! ding!

  • Stealtheprize

    Wow, there is a lot going on on this blog. Before digitally distributing my band’s new album on Tunecore, I obviously compared with other companies. I chose Tunecore for one specific reason…..no percentage cut of every sale. Consider a new release for both companies. You pay a setup charge for both in the first month, and let’s say you sell 1000 songs at $.70 a pop, there is a $44.10 difference between Tunecore and CD Baby payouts. Obviously Tunecore pays more. So in the first month, Tunecore almost pays for it’s setup over CD Baby, and definitely pays for itself over the course of year. The more you sell, the bigger the difference, consider 10,000 sales, that $44.10 difference suddenly becomes $441! Now thats a considerable chunk of loot that the artist should be making….not CD Baby. So, financially speaking, regardless of $50 per year per album, Tunecore is a better company. Period. Tunecore is definitely more worth while if you sell a lot of digital songs, but neither service is going to make you tons of money if you can’t market your music well enough to sell it.

    What I feel the artist should be considering more seriously is the 30% cut the retail stores are taking. We aren’t talking about physical distribution here! For Christ’s sake why would any ONLINE retailer feel they have the right to take 30% of each sale. This percentage is well justified in regards to physical distribution, they actually have to DO WORK to get your album on the store’s shelves. They have to compete with thousands of others for shelf space. There is no shelf space on iTunes retail store. There is little to no work involved on iTunes end to even get your music on the store. It’s a digital platform connected to a purchasing client. Is that worth 30% of EVERY SINGLE sale??!! No way in hell that’s justified. There are physical distribution companies doing way more work and charging less of a percentage. This clearly needs to be addressed in someway. If anyone is stealing money from the independent artist….it’s the online retail stores.

    • Stealtheprize

      Oh and iTunes will never become their own aggregator. They are making a killing without having to put forth any effort. Why would they all the sudden want to manage the thousands of accounts that they have received from Tunecore, Cd Baby, etc. My guess is that if that happened, iTunes would take an ungodly % of each sale, and make it totally worthless for the artist to be distrubted on their store. But they know that, which is why they would never want to be their own aggregator.

    • Anonymous

      @stealtheprize

      how do you feel about selling a CD to Walmart for $10 and then having them mark it up 30% to $13 and selling it?

  • Buzz

    “As an example, a song bought and downloaded from iTunes (or any digital
    store) is legally considered to be a “reproduction,” therefore each and
    every time a song is downloaded from iTunes the person who wrote the
    song (meaning you, or someone else if you covered the song) must be paid
    the mechanical royalty of $0.091.”

    This is interesting Jeff.  It’s my understanding that mechanical royalties are bought “in advance” of sales, meaning that if an artist wants to purchase the right to reproduce a song 500 times, that 500 X .091 = $455.00 must be paid to the copyright owner in advance.  Is that not right?

    You seem to be saying that digital download writer copyright payments can be paid at the time of or later than the song is paid for and downloaded.  Is that correct? 

    If it can be paid for at the time of the sale that is a real advantage and something worth knowing if one is an artist and has cover tunes recorded and uploaded on Tunecore.  Can you share with me where “exactly” that legal information can be found?  By exactly I mean very specifically where the language can be read indicating that that is the law.  I’m not looking for a general answer, but a very specific cite.  Thank you in advance for taking the time to make us aware of this. 

    • Anonymous

      @buzz

      correct, you do not need to pre-buy the “mechanical royalties”. The pre-buy is a convenience service.

      here’s how it works. First you have to go to the entity that controls the right to reproduction (called the “publisher”) and ask them for the mechanical license. Sometimes the Publisher will broker this job out to a place like HFA and ask HFA to do this for them.

      HFA, or the publisher, can say no, we wont grant it to you (for “larger” entities they will structure the deal where you account to them every 90 days and pay them for reproductions that occurred during those 90 days, no pre-buy needed). You can then say, “well, i made a good will effort to get the license from you and you refused, therefore my butt is covered. In addition, I will now follow the law that states how I can do this if you say no.”

      The law on how to do this if they say no is hard to understand, but you absolutely can do it.

      Here is a link to that law – its sections 37 C.F.R. Sections 201.18 and 201.19.

      its dense and boring. Its like reading the rules to a game you want to play – which is exactly what it is. Instructions on how to do it.

      http://www.bitlaw.com/source/37cfr/201_18.html

      Jeff Price
      TuneCore
      646 651 1054 – ph
      http://www.tunecore.com
      jeff@tunecore.com

      • Buzz

        This is really an important reply Jeff because it allows artists to engage in their music business at far less money than they would otherwise be able to do so.  In this context the subject of your article is confirmed.  Now artists need to learn how to adequately market their music.  Once those methods are mastered artists’ futures are really in their hands given the opportunity that Tunecore provides them.  Thanks for your complete and helpful response.

      • Buzz

        This is really an important reply Jeff because it allows artists to engage in their music business at far less money than they would otherwise be able to do so.  In this context the subject of your article is confirmed.  Now artists need to learn how to adequately market their music.  Once those methods are mastered artists’ futures are really in their hands given the opportunity that Tunecore provides them.  Thanks for your complete and helpful response.

      • Buzz

        Jeff, I have read the law regarding mechanical licensing and found it to be clear and understandable.  It does involve some planning but is perfectly doable for the serious artist.  It will take some time to organize and report but is more preferable than paying mechanicals in advance, unless, money is no object.  Thanks again.

        • Anonymous

          @buzz

          glad to help! I’ll tell you, if you can do this for yourself, you can do it for others. It would be a good business. People can pay you a much lower fee for a service to pay mechanicals per the law as opposed to pre buy

          jeff

  • Darcey139

    So is that mechanical royalty of 91cents for the songwriter/copyright owner supposed to be paid by tunecore and cdbaby, or PROs?

    • Anonymous

      @darcey139

      the $0.091 (little less than a dime) in the United States for a download is paid back to the record label. The record label then has to pay the songwriter.
      outside the US the money for downloads is paid to the third party organization where it sits and is given to others unless the songwriter/publisher hires someone to get it

      jeff

  • Darcey139

    So is that mechanical royalty of 91cents for the songwriter/copyright owner supposed to be paid by tunecore and cdbaby, or PROs?

    • Anonymous

      @darcey

      In the United States, the mechanical royalty is paid by the digital store to the record label (this is you)

      The label is then are responsible for paying the songwriter/publisher the mechanical

      Outside of the United States the mechanical royalty is paid by the digital store to a copyright collection agency

      the money sits there until you hire someone to get it. If you dont, they give it to EMI, Sony, Universal and Sony

      jeff

      • Darcey139

        Thanks for your response….so if I’m listed as the label, then would I see those funds come up in the same area that I would see track sales (like in “Sales Reports”) or would it be processed differently and sent somewhere else?
        Sorry Im a little confused…I’ve been with both tunecore & cdbaby before and have listed my own label name, but I don’t think I’ve ever been issued compensation for mechanical royalties. Am I missing something? Is there a way to track where the mechanical royalties are sent?

        • Anonymous

          @darcey139

          in the US, the money you received from iTunes from downloads via TuneCore includes the money owed to the person that wrote the song; $0.091

          if you received $0.70 from a sale of a song in iTunes, and you wrote the song, than $0.091 of the $0.70 goes to you and the rest goes to the “label”

          there is no separate report, in the US, you, as the label, have to run this report and then account back to the songwriter/publisher

          If you are the songwriter, you are “reporting” to yourself

          If you are covering someone else’s song, you would need to get the mechanical license from them and report to them.

          Outside of the United States this money is not paid to the label, its paid to a copyright collection organization. You as the songwriter/publisher would need to hire someone to go this copyright agency and collect it for you ( we offer this service for songwriters)

          In the US, for STREAMS, its different. For streams the entity streaming the songs (like Napster) is required to get a license directly from the songwriter and they pay them a mechanical royalty directly based on a formula about every 30 days

          jeff

  • http://www.fororchestra.com WaltRibeiro

    Typo in author’s note where it says “Therefore, “your money” is not $0.70, your money is $0.70 – $0.091 = $0.609” I think you meant to write “0.0609” although I could be wrong.

    Also, I agree with this article, although I think ‘illegal’ is a little dramatic, and not entirely accurate. I think the company in question did the 9% cut because that was the cut they had even before all this digital stuff was ‘set in stone’.’ Nonetheless, netting 63 cents and then paying 9.1 cents for mechanicals is A LOT different than making 70 cents and then paying 9.1 cents for mechanicals. 7 cents adds up to a lot over time.

    The percent split works out better for some people who don’t plan on selling many songs, or just want to “set it and forget it” without having to worry about annual fees or upfront costs. But, for me, I like the Tunecore model much better :)

    • Anonymous

      @WaltRibeiro

      Thank you for taking the time to read and comment, I really do appreciate it.

      I know this stuff can be complicated – and that’s my point exactly. I can assure you with no hesitation or doubt that the backend companies are absolutely aware of what they are doing and are banking on others not being familiar with the laws. In the US the % they are taking is a % of the money the label makes + what the songwriter makes. They have no right to take a % of what they songwriter makes, that would be illegal. Therefore, they are taking a larger percentage of what the label makes and blatantly misrepresenting the truth to skim more from the artist.

      Outside of the US, they only take a % of what the label makes. How then in the US do they justify taking a % of what the label + songwriter make? It’s adding another unrelated income stream to the base to take more money. If they can add the label + songwriter money and then take a %, why not add the label + songwriter + public performance income and take a %? I can tell you why, they would get caught, it would blatantly obvious, but because label + songwriter is less obvious, they just get away with it. It makes me sick. Why not just be transparent, at least tell the artist what you are doing, dont hide behind complex copyright law.

      In regards to the calculation, it is $0.609 (a little less than $0.61). The math works as follows. iTunes pays out $0.70 on a download. The mechanical royalty owed by law for a song under five minutes is $0.091 (a little less than a dime). $0.70 – $0.091 = $0.609

      It is absolutely illegal not to pay the songwriter/publisher the mechanical royalty owed off the reproduction. This is a legal statute passed by congress. There is a governmental body called the CRB (Copyright Royalty Board – http://www.loc.gov/crb/) that oversees and sets these rates.

      Here is a link to the law that provides the federally mandated guidelines – its sections 37 C.F.R. Sections 201.18 and 201.19.

      its dense and boring. Its like reading the rules to a game you want to play – which is exactly what it is. Instructions on how to do it.

      http://www.bitlaw.com/source/37cfr/201_18.html

      jeff

  • Bryan Reeves

    So another “company” charges 9% on sales … Tunecore now charges $50 per year per album … which I agree was quite artist unfriendly given I signed our band up understanding it was about $20/25 per year. And Tunecore, once you’ve got us hosted on iTunes, you’ve got us by the bells because what are we gonna do abandon our albums???

    I would love to know what is Tunecore’s average artist payout per album, because to beat that 9%, a Tunecore artist (paying $50/year) has to earn over $555 per album per year. Assuming most of that comes from iTunes, and iTunes pays out roughly 70%, an iTunes artist must sell almost $800 worth of that album on iTunes to match that 9% fee from the other “company”.

    Granted, if you’re not making $555 on your album from iTunes a year, then you’re probably not serious about your artist career; still it puts in perspective what 9% and Tunecore’s new $50/year charge actually might mean to an independent artist.

    The “other company” is clearly making 9% on the album (plus initial fees), regardless of how well it sells (or doesn’t). So what they’re making is obvious.

    Tunecore, what are you making on average per artist album?? Is it
    more than 9% or less? Are you transparent enough to share your average/album take??

    • Anonymous

      @bryan

      No amount of slide rulers and calculators is going to convince me to mislead or screw an artist. It’s about transparency. Why is that so hard? Why can’t artists be told up front in black and white what to expect so they can run the very calculations you are trying to run. Why say you are taking 9% when you are actually taking over 10%?
      The back-end model allows for this exact type of slight of hand. How much does it cost? I don’t know.
      As far as how much are we making per album. What an odd question to ask. To make sure I am understanding, you are going to base your decision on using company not on the value of what you are buying but on something else? Is that how you determine what guitar to buy?
      (the answer, btw, is that it depends on the customer. We have a full time Artist Support staff. All they do is take phone calls and answer emails. One customer can take hours of time, guess what we lose money. Others dont call, we make money. Some infringe on copyright, we lose lots and lots of money. Others need changed, help and so on.)
      Bryan, TuneCore has to work for you. It cannot be what I think should work for you. You are the customer, I am here to serve you. Your opinions are, by default, right, as they are your opinions.
      My hope, my goal, is to please all of you while treating you all the same.
      As you have been extremely honest and open with me, I hope you dont mind me being honest back. When I started TuneCore 5 1/2 years ago, it was the first time any artist could gain access to distribution, keep all their rights, get all their money. I made the pricing up while I was taking a shower. It used to be $7.98 per release per year + $0.99 a song + $0.99 for each store you wanted to the release to go to. As I added more stores, the price started to climb. It did not feel like it to people as it was a-la-carte, but they were paying more than we charge now. Over the years I fiddled with other pricing trying to keep costs down while improving the system. I added more al-la-carte, and then people were paying over $65 on average. It just felt wrong to me. So I did what I could to lower pricing while adding more.
      That being said, this is the part I think you are not going to like. Sometimes, I don’t get it. That is, I ran a label for 20 years. My entire life from college though now life I have been surrounded by musicians. When they gig, they blow more than $50 in one night on beer. Many will Fed Ex masters and art for over $50 and think nothing of it. Than there are the fuzz pedals, Pro Tools, guitars and all the other gear costing hundreds if not thousands of dollars.
      Then there are all the other things paid for from time to time – pizza, beer, movies, Berklee school of music, pot, video games and so on.
      And somehow many of those things are OK to spend money on, but $49 ($4 or so dollars a month) for worldwide distribution of an album, collection of all the money, storage, new stores, new technology, protection of your copyrights, having a team – your own record label with a staff there to help and support you – is too high?
      Im sorry, I truly am. I want this to work for you. I want you to think of it the way I do but I can see you do not value it the same way. The TuneCore staff is your staff, they work for you. They yell at retail stores on your behalf, they chase people down and get your money, they fight for you to get better payout rates, they will go to the matt for you to fix any problem, provide information, make changes or take on someone or something that is trying to take advantage of you.
      For about $4 a month for an album.

      We are the best in the world at what we do and we work for you. Every day, in and out. Your music, your art, deserves it. I owe it to you.

      I wish I could make it free, I truly do, I can’t. All of this stuff costs money. But what I can do is improve, provide more outlets, more value and services. Launch new things to get more of your money (click here for more info – http://blog.tunecore.com/2011/07/how-they-legally-steal-your-money.html )

      Hire new people to market and promote your music – click here to see the results http://blog.tunecore.com/2011/07/tunecore-artists-featured-in-digital-stores-july-2011.html

      Hire people to create deals with brands on your behalf – click here to learn about what our EVP Business Development/Integrated Brand Marketing does for you (starts at about 26 minutes) – http://www.youtube.com/watch?v=wldRBmNGMj8

      Robbery to me is when someone lies or steals from you – click here to see how they do that – http://blog.tunecore.com/2011/07/how-they-legally-steal-your-money.html

      Robbery is not when you are clear, open and transparent, provide information and give the artist the information to make the decisions they believe are best for them.

      There are so many things I see musicians spend $50 on a year – sometimes I am stunned at how they value three beers and a large pepperoni pizza more than what we do.

      But its moot, as I am here to serve you. You have to agree with me, and you dont. There are other things you think are worth $50 a year, having worldwide distribution, keeping your rights, getting all the money from the sale of your music, have a full team working to market and promote your music while protecting your copyrights and more is not worth it to you.

      I wish to god I could change your mind, I understand I can’t.

      All I can say is we are here if you want us to be there for you.

      jeff

  • Beepity

    LOL Any musician who’s not on Bandcamp is an idiot. Tell your fans to buy from you directly.