Legal music downloads and bluegrass

viewpointThe bluegrass music industry seems to find itself consistently behind the curve on technology, but more and more bluegrass artists are finding ways to make their music available for legal download. We’ve posted about artists that have downloads available here, here, and here. It’s not always easy or profitable, but it is the direction the entire music industry is heading.

Chris Burton, who we recently did a story about here, just alerted me to a new service being offered by CD Baby.

…you just lend us the right to be your digital distributor: to get your music to legitimate music services like Apple iTunes, Rhapsody, Napster, MSN Music, MP3tunes, AOL’s MusicNet, Yahoo MusicMatch, and more…

…We pay you 91% of whatever they pay us for the use of your music. (Usually around 60 cents per download.)

For an independent artist this may prove an accessible way to gain entrance into the catalogs of these download services.

Now let’s take a look at some of the latest happenings, in the broader music industry, in the area of legal downloads and then open this thread to discussion as to the impact of these events, and trends, on the bluegrass industry.

The major online music download/subscription services have recently come to blows with the National Music Publishers’ Association (NMPA). The NMPA is stating that during the last four years in which the subscription based services have operated under a temporary agreement, no royalties have been paid.

“The problem is that it’s been four years, and we have not had one penny distributed to songwriters or publishers,” said David Israelite, chief executive officer of the National Music Publishers’ Association. “The digital subscription market has been inhibited by the lack of certainty.”

CNet news.com

Even Apple Computer’s iTunes, which is a pay-per-download service, is at odds with the NMPA now over royalty amounts. The NMPA wants to raise the amount from the current 5.25% to 17%. The Digital Media Association (DiMA), which represents large companies including Yahoo, RealNetworks and Apple, has suggested a rate of 6.9% instead. Negotiations have largely stopped at this point with neither side willing to move.

“If they want to raise the prices, it means that they are getting greedy,” Jobs, chief executive of Apple, said at a news conference here Tuesday. “If the price goes up, they (consumers) will go back to piracy and everybody loses.”

CNet news.com

I don’t understand why it’s not the standard $0.085 mechanical royalty rate. If you are buying a file that you can download and burn to disc, how is that different than buying the disc. In my opinion the rate should be consistent.

In the midst of the fight over royalty rates Billboard has reported that Warner Music Group has plans to form a digital label, tentatively named Cordless, which will release songs exclusively for download over the internet or to mobile phones. Edgar Bronfman Jr., Warner Music’s chairman and CEO, said that the new mechanism will be called an “e-label,” in which artists will release music in clusters of three songs every few months rather than a CD every few years. This is pretty major news from a label the size of Warner Music. I’m not sure I see the bluegrass labels adopting this model anytime soon though.

Here are a couple questions to think about.

Would you rather download songs on an individual basis, or buy a CD in a physical package?

Personally, I prefer the download route. I LOVE my iPod. It’s the coolest way to listen to music. I hate the thought of dealing with all those CDs again. The only thing I don’t like about it is the lack of artwork and liner notes. I wish they would make those available as a pdf file with the album download. Some artwork is, but it’s just the cover art and not the entire package.

Do you think the royalty rate for downloads should be higher, lower, or the same as mechanical royalties?

As I stated earlier, I believe they should be the same, both for artists and songwriters. There is no reason for either to take a lower rate. The discount in sale price for the download should be born by the label as they do not have to bear the cost of manufacturing a physical package for a download sale.

Do you believe record labels will survive the increasing popularity of internet downloads?

I believe they will. They will just have to modify their business model. The label still has a lot to offer an artist in the way of financial backing, marketing and PR, and even distribution. It’s just that the distribution model is changing.

Let’s hear from the bluegrass community (that’s you) on this subject.

  • The DiMA proposal is also out of favor with the primary songwiters’ associations (ASCAP, BMI, SESAC) and the Harry Fox Agency, who handles mechanical and video synch licensing. They feel that DiMA’s suggested royalty structure is unfair because they see most of that money going to the labels, and not enough to artists or songwriters.

    I recently participated in a meeting about this very topic with our Congressman here in Roanoke, Bob Goodlatte, and was pleased to see how well informed he was on the matter, and how sympathetic he seemed to be to the question of songwriters (and artists) receiving an equitable share of the proceeds from digitally distributed audio content.

    I agree with Brance that this is a pressing issue, and one that is important for both the people who write, record and distribute music online, but also for everyone who prefers obtaining their music this way as well. The sooner that a fair system can be established, the sooner we will see the industry move forward on all cylinders to make more content available this way.

  • Very simply, I think the pay-per-download system allows the average musician to get the wide distribution they used to rely on the record labels for.

    Nowadays, independent musicians can find reasonable studio recording time, together with reasonable cd pressing costs, and make far more than 6.9%, or even 8.5%, of the average sale of a dollar per song – and they’ll get distribution to millions of buyers who now search by genre for new Artists/songs on iTunes, Napster, etc. Heck, the way things are headed, musicians don’t even need to invest in pressing cd’s – customers are buying 100’s of millions of songs one at a time.

    Steve Jobs is right – if iTunes raises the price of songs people will go back to piracy. Instead, musicians need to wrest control of their product back from the record companies, who are simply adding a layer of middlemen without adding any value. Then there will be plenty of margin for the artist, yet an affordable product for the consumer.

    My band has a cd that’s soon to be released and while we’re planning on selling at our shows and the local record stores, we’re also planning on going the pay-per-download route.