RIAA Planning to Cut Artist Royalties

The globally despised RIAA is at it again. according to their public statements, they profess to have the best interest of the artist in mind. By attempting to stamp out piracy and illegal downloading, they claim to be trying to protect the value of recorded music and the livelihoods of recording artists.

Funny then that on February 5th 2008 IGN reported that the RIAA is now attempting to lower artist royalties on digital tracks, from 13% of wholesale to just 9%. How is this protecting the interests of artists?

Hypebot points to the following statement made by the RIAA in connection with this fiasco: “Mechanical royalties currently are out of whack with historical and international rates,” RIAA executive VP and general counsel Steven Marks said. “We hope the judges will restore the proper balance by reducing the rate and moving to a more flexible percentage rate structure so that record companies can continue to create the sound recordings that drive revenues for music publishers”.

Now, this statement is not new. If anything, the above statement was made as far back as November 2006. What is really shocking about all this is the fact that the RIAA obviously saw the sales downturn of the industry at least a year in advance, and it’s only reaction was to attempt to rob the artists in order to hedge the major labels’ earnings against revenue loss due to the decline of CD sales.

So, the story continues. And it gets worse. Nowadays, the current mechanical rate on downloaded tracks is about 9 cents. But, as reported on arstechnica.com, the RIAA wants that dropped even lower, to only 5 or 6 cents per track! AND, they want the streaming rate to be dropped to around HALF A PERCENTAGE POINT! Unbelieveable.

What artist would sign a major label deal under these conditions? It’s outrageous.

The RIAA’s business model seems to be to rip off the people that make the music, and to sue and intimidate the people who buy the music. Unbelievable.
Now, as a Hip-Hop artist, I know that one of my biggest target markets is the college market. These kids are not only supportive of artists they love, but tend to be the “tastemakers” when it comes to breaking new artists. Not to mention, they are among the most loyal music fans out there.

I just visited the RIAA’s home page. Just for my daily dose of thorough disgust. And one of the first things I noticed was that the RIAA is gleefully reporting that They’re continuing their “deterrence program”, and that 18 Schools have received pre-lawsuit letters in the first wave of 2008. They sound PROUD of themselves to be suing and intimidating one of the most loyal fanbases out there.

Instead of finding new ways to market and make money that doesn’t involve litigation and lawsuits (like trying to advise their member labels to adopt ‘360 models’, which I think is a great idea), they’re continuing to sue their client base, AND rip off the artists. And they show no sign of changing their ways.

The RIAA is financially backed by the major labels. Which means any of their idiotic decisions don’t affect us indies who are embracing music 2.0 and finding many creative ways to get paid from our art, without intimidating or litigating our fan base. Most independent labels pay their artists much better than 9-13% for digital downloads anyway (I know mine does).

Honestly, all I think the RIAA is accomplishing is the hastening of the demise of their organization and the major labels that support them. And they’ll blame the artists, the fans, the pirates, and everyone else, when they really will have brought it all on themselves.

1 Response to “RIAA Planning to Cut Artist Royalties”

  1. February 13, 2008 at 7:44 pm

    See thats why its better to do your own thing this days, all you need is money. BYOB!!!! Fuck the RIAA

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