Having finally cast off that clunky "pro-artist" veneer and finally embracing good old fashioned greed, the RIAA is seeking to lower the royalities it pays artists. Mechanical royalties -- CDs, vinyl, and digital sales - - are currently at about 13% wholesale. Though this is often lowered when contracts with artists are written up, this comes out to about 9 cents a CD. Now the RIAA is seeking 8% wholesale. The argument is that record labels are failing while music publishers grow, and the artist should be the one keep the balance in check.
The RIAA is at least somewhat correct in their assertion that music publishers are usurping power from record labels. Publishers are often more streamlined, and they're the ones that get songs up for sale on the net, whereupon they split revenues 50-50 with songwriters. If you involve a label, however, that 50-50 split comes from the "publisher's share", which is half of total revenue. This is also assuming the publishing company owns exclusive publishing rights to the track, which they almost certainly do not unless they're a completely independent artist; record companies often start their own publishing houses so that upon signing with them you're forced to use an in-house publisher.
What makes this all even more unsavory is that online distributors like Apple and Napster have combined forces to demand a four percent royalty rate on wholesale revenue. In fact, the RIAA believes the artist should recieve absolutely nothing when their song is streamed online.
Next time you're looking for some scruples, don't call up the RIAA.
dude, the riaa and the digital retailers are trying to negotiate a win-win rate. the rate we have now were set for a different era when people couldn't steal music so easily. when the music is stolen NOBODY gets paid. right now p2p stealing outnumbers legal purchasing over the net by 20:1. the only way to get people to stop stealing and start buying is to provide the music at a cost everyone can afford. the digital retailers are all losing money on the sale of digital music as things stand now, yes, even apple loses money on the sale of music. if more rational royalty rate are not negotiated NOBODY is going to make any money in the music biz over the long run, not even the publishers.