RIAA goes after Usenet

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The Eternal Student
Member Since: Oct 08, 2005


Does anybody know if the 'damages' collected by the RIAA actually goes to the 'damaged' artists, or does the RIAA just take it to float their budget?

Kinda sucks if the people harmed don't even get anything out of it, but the damages are probably a drop in the lake for the big-name artists anyways.

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Since: Jan 24, 2006

Oct 21, 2007 03:24 pm

Damages do not go directly to the artists, they go into the companies which can, in theory, eventually benefit the artist down the road.

The RIAA is actually going against the site usenet.com not the groups themselves. The usenet.com website advertises "access to millions of MP3's" which is the part they really don't like.

Record companies remain the evil empire, I was listening to an interview with a guy this week, he was in a band that sold 1 million copies of a single in the 90's, the band ended up owing $250,000 to the record company and were charged back for items such as toilet paper and the cups of coffee they were provided during the meetings.

A small pie will soon be eaten
Since: Aug 26, 2004

Oct 23, 2007 04:52 am

Can some one break this down for me

What does a record company actually do?


Pay for recording, marketing and so on?

Since: Apr 03, 2002

Oct 23, 2007 06:25 am

As I understand it the record company basically funds recording, marketing, distribution, etc...and it seems, since many artists have the same story tony just mentioned, that the money is actually only a loan to be paid back out of the artists profit...which is laughable...

I have heard it said many times it's only after several successful albums that I band really gets the rock star wealth, people that prove longevity.

Since: Jan 24, 2006

Oct 23, 2007 10:29 am

Under the standard system the record company will give you an advance, lets say $100,000 for your recording. This sounds great but then they charge you ridiculous prices for their own services. So lets say by the time you have finished recording you owe them $200,000 (for the advance + expenses).

Now the CD sells for, lets say, $15. Approximately 75c of that goes to the songwriters and around 65c to the band (those numbers could be off). The rest goes to the record company, producers etc. etc for marketing and other costs.

The really funny part is that they now say that you have to take the 65c per CD and charge it against the 200,000 you owe them from the recording. So, in this example, you have to sell 300,000 copies before you make a penny back. They also charge you for videos, and other forms of advertising.

This is why many people, large and small, would often rather sell CD's from a website for $10 and only sell 5000 because they make more money that way.

This is the system that I consider to be broken, where the record companies are making a lot of money, because they aren't signing a lot of bands these days, and no one else is. It's also why Radiohead can do the download thing because they sold around 2 million downloads I believe, lets say the average person paid $2, they made $2mill. They would have to sell 20million CD's to make that amount the traditional way.

A small pie will soon be eaten
Since: Aug 26, 2004

Oct 23, 2007 12:29 pm

So lets break down the costs for the record company?

stage by stage

Prince CZAR-ming
Since: Apr 08, 2004

Oct 23, 2007 02:44 pm

Wasn't there an article around the net, following a signed band's turmoils. It was showing where their money went, and who got what, and how much.

It was tongue-in-cheek, but still, it gave an idea of how artists are raked over the coals.

During filming of videos, and recording, all food and other expenses were charged back to the artist / group, to be taken out of any $$$ they make.

It boiled down to $1 mill made, but the band got around $10k to spread amongst themselves.

I couldn't find it, hopefully someone else remembers it.

Prince CZAR-ming
Since: Apr 08, 2004

Oct 23, 2007 03:13 pm

here's something that's similar:



Since: Jan 24, 2006

Oct 23, 2007 03:58 pm

Click on it to read it properly


Since: Jan 24, 2006

Oct 23, 2007 04:00 pm

Seriously now. In English Pounds. However this does not tell the whole story since what the band earns has to repaid to the label for all expenses.

Retail Price 12.99
VAT paid to government by shop 1.93 (12.99/1.175 = 11.06)
Net to shop: 11.06
Shop marks up 50 percent of
Official Published Price to Dealer (PPD) 11.06/1.50 = 7.37
PPD 7.37
Shop gets eight percent discount 7.37/1.08 = 6.78
Net to distributor 6.78
Distributor takes 25 percent 6.78 0.75 = 5.09
Net to label 5.09
(Label pays 17.5 percent VAT to government if it is VAT registered)
8.5 percent of 7.37 PPD to MCPS 7.37 0.085 = 0.63
(20 to 30 percent of 0.63 taken by publisher) 5.09 - 0.63 = 4.46
Manufacturing cost of 0.60 4.46 - 0.60 = 3.86
Promotion cost of 1.00 3.86 - 1 = 2.86

So the label gets 2.86, less any artist's royalty at 14 percent of PPD (7.37 0.14 = 1.03), and less mastering, artwork, and wages for freelancers.

Since: Jan 24, 2006

Oct 23, 2007 04:01 pm

SO all that goes to show me one major thing. Download albums should not be priced close to the price of a store bought CD, but they are getting priced in that vicinity.

Start at net to label of 5pounds and we're in the right pricing arena for downloads.

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