With a cough of dust and a slithering of centipedes, The Who’s Peter Townshend has once more fallen out of his coffin to roam the world. This time, rock and roll’s elder statesmummy has emerged from his tomb with a purpose: to call Apple and iTunes a “digital vampire” that “bleeds artists.”
Townshend’s argument is this. Because Apple makes 30% of every iTunes track sold, it’s sucking artists dry. Unlike the music publishers, though, iTunes doesn’t give anything back, such as “editorial guidance and creative nurtur[ing].”
“Is there really any good reason why, just because iTunes exists in the wild west internet land of Facebook and Twitter, it can’t provide some aspect of these services to the artists whose work it bleeds like a digital vampire, like a digital Northern Rock, for its enormous commission?” Townshend asked.
Well, okay, let’s do the math here. In 2010, Apple earned thirty cents for every ninety nine cent track. The labels, on the other hand, earned 53 cents per ninety nine cent track. The average artist? Makes just nine cents per track.
Look, Townshend. First of all, “creative nurturing” isn’t a distributor’s business, it’s a label’s. Saying otherwise is absurd. It’s like saying Barnes & Noble should be held responsible for setting up writer’s colonies. A distributor’s job is to sell; a publisher’s job, on the other hand, is to make sure they secure the best talent by investing in up-and-coming artists and helping them generate the best content available.
Second, the music industry is making almost twice what Apple is making on every iTunes track. Apple’s existing agreement with the music industry recognizes that labels put a lot of work into nurturing and growing talent.
You want to complain about something? How about complaining about the fact that less than ten percent of the proceeds of each track sold on iTunes go to the artist who actually wrote the damn thing? But like most popular rock artists, Townshend has crawled into bed with the labels. He’s one of them now, and so for all his talk about artists being sucked dry by the iTunes nosferatu, his real problem is that he thinks the music labels should be getting a bigger bellyfull of blood.
John Brownlee is a writer for Fast Company, and a contributing writer here at CoM. He has also written for Wired, Playboy, Boing Boing, Popular Mechanics, VentureBeat, and Gizmodo. He lives in Boston with his wife and two parakeets. You can follow him here on Twitter.
113 responses to “iTunes Is A “Digital Vampire” Killing Artists Says The Who’s Pete Townshend”
Maybe the artist should just produce their own music and offer it for 50 cents on their own web site. Then they can keep… you know… all of it. In this day and age who cares about paid marketing and publicity? I surf and browse youtube and grooveshark to find some amazing music. I’d love to be able to actually pay the artist directly for their tunes, but the system is broken.
Well, I now feel less bad for ripping every The Who song off youtube and running it through a mp3 encoder. FOR FREE, PETE!
But John, please tell us what you REALLY think.
Your description of Pete Townshend is not cool. He’s younger than Paul McCartney. Would you say the same thing about Sir Paul?
This is BS, Artists used to be too highly compensated before. Now their are more forms of media, types of media, and streams to get it. STOP COMPLAINING and WORK like any other person. YOU ARE A MILLIONAIRE and complaining you don’t make enough money. #F_OFF
agreed. pete is a genius just as much as your (our) beloved steve jobs. i love this site and check it daily but that first few lines is awful. it got me to stop reading the rest. pete townshend “thought different” and changed the world. his work endures and inspired 30 years ago and still does today and will for a long time.
He is right. And he is not coming from a millionaires perspective at all. He is just sad that the good parts of the music industry is vanishing.
It’s not like most artists made a whole lot from album sales either… most make the bulk of their money from shows & concerts.
For those who think iTunes brings nothing to the table keep this in
mind. Since the introduction of the iOS Newsstand several weeks ago,
Conde Nast has seen a 250% uptick in sales and subscriptions on the same
magazine apps they were already selling on the App store. If they had
been selling them on their own sites to “keep all the money” I’m sure it
would have been an even lower numbers (or they wouldn’t be in the
Newsstand app where Apple takes 30% in the fist place).
In other words, its all about location, location, location.
For those who think iTunes brings nothing to the table keep this in
mind. Since the introduction of the iOS Newsstand several weeks ago,
Conde Nast has seen a 250% uptick in sales and subscriptions on the same
magazine apps they were already selling on the App store. If they had
been selling them on their own sites to “keep all the money” I’m sure it
would have been an even lower numbers (or they wouldn’t be in the
Newsstand app where Apple takes 30% in the fist place).
In other words, its all about location, location, location.
Just like the Arctic Monkeys did after the record industry told them to pack sand… You are a perfect example of the new customers who are not interested only in the stuff that is rammed in our ears by commercial radio and their selective artist support practices… If only the record industry would learn from that…
“Hope I die before I get old.” – P.T., 1965
I’d like to know what percentage retail stores got before we went to
digital sales. I’m have a sneaking suspicion it was close to 30% (or
more) of the price of a CD. And did these stores “nurture artists”? As
far as I know, that has always been the label’s job. It sounds like
what Townsend is really mad about is that he doesn’t get a larger cut of
the money in the digital age. than he got in the analog one.
Jonathon Coulton seems cool with iTunes. The following is from his interview on Plant Money on National Public Radio:
Jonathan Coulton’s songs almost never get played on the radio. He
doesn’t have a contract with a music label. Yet he’s a one man
counterargument to the idea that musicians can’t make money making
music.
In 2010, Coulton’s music
brought in about $500,000 in revenue. And since his overhead costs are
very low, most of that money went straight to him.
Did he ever expect to make that kind of money as a musician?
“Of course not,” he says. “This is absurd.”
Source: http://www.npr.org/blogs/money…
No — it wasn’t the same for all categories of releases but it was generally somewhere between 10% and 20%.
[…worked in an indie record store for 10 years]
It also depended on whether you were ordering direct from a label or from a 3rd party distributor. Over the years though, the trend was for the record companies to lower the gap between wholesale and list price & they had rules about how far your store price could deviate from the list price.
A lot of times when you see new releases on sale at chain stores, they are selling the album below wholesale banking on other sales to make up the loss.
In fact toward the end of what I would call the music store era we were aggressively expanding used CD sales because with those you could easily have upwards of 50% profit… we still had new CDs but sales were dropping because of mp3s and other things the labels were doing (scaling back marketing, scaling back promo CDs and whatnot) that generally made it more difficult for artists who weren’t a billboard top 5 to get exposure.
The Who? Seriously, who still cares about the Who? Pete Townshends last viable contribution to the Music world was pressed to vinyl in the late 70’s. Every penny he has made off of iTunes was for stuff he had already recovered DECADES before.
I have some Editorial Guidance and some Nurturing for him – Your music is dated, your views are dated, you opinion is worthless and you are a relic. Hang it up and die with dignity.
& one more thing — as a store you’d never “nuture” an artist by providing artistic advice, but you know… most people working in an independent store did so because they really like music & the customers came because they wanted to shop at a place where the staff knew what they were talking about. In that sense, we had a lot of influence on what people would buy because we were always being asked about what was good & obscure. So when the labels cut back marketing like promo discs and spots at concerts it limited our exposure to smaller artists [prior to about 2000 we would be able to listen to every new release for about a week before it went on sale & could easily call up a label rep to see just about any concert we wanted] which meant we were less likely to be pushing sales of that kind of thing unless it was something we heard about by other means.
The more interesting part of his comments were about individual artists being able to _bypass_ labels. That’s asking Apple to effectively become a label for small artists. Right now, if you want to get your music into iTunes you need a label and a publisher. It’s the rare mega-group that can bypass this process.
Unfortunately, it’s not in Apple’s interests to support direct artist publishing to iTunes. It’s much simpler for Apple to deal with fewer customers who have IT staff to deal with the feeds to iTunes. And it’s much simpler for Apple to not worry about the licensing issues that labels and publishers have to deal with.
I don’t see it changing any time soon. In the short term the best option for small artists is going to be hoping for companies like The Orchard to support individual artists directly.
He’s right. Let’s go back to the days of napster and limewire.
Old people are cute.
This works for Major Big Time Sell Out Arenas Artists, but who is really going to go to small time band websites and search for music. How are those artists going to hire and pay a web developer to distribute their songs and then report their sales to the record labels.
If only there was a system that gathered all those artists up and put them in one store. Sure the system would charge a commission (probably around 30%) but the record labels (who owned the music) would get their share (70%) and pass some of that on to the artist.
Many of the indie stores I used to frequent though sold CD’s from 11.99 to 13.99 (while Tower and Borders other chains were charging 17.99 and 18.99 for theirs). I am aware Best Buy screwed all that up by selling CD’s as loss leaders the week of release but it appears that retail cut was a variable thing. Indie stores new that theuir customers would be loyal and buy more at the lower and more frair price while chain stores didn’t had a whole lot more overhead (expensive leases, etc).
I would consider iTunes to be closer to a chain store in the amount of money they sink into running their store. I would not be suprised if their cut is no different than that of a Borders or Tower.
Good point. People will always go where it is easiest to obtain want they want. It is easier to go to a record store and buy it, then rip it to your computer, then put it on your iPod. Or is it easiest to get it off your computer (legally or not ) and directly put it on your iPod or whatever.
If their was no iTunes or comparable, II guarantee people would be getting more from illegal sources off their computer.
While I can see Townshend’s point– In the past record stores took only a small mark-up on the product– (which is why there are very few record stores left)– the distributor has never had a role in guiding the artist.
It would be like buying a painting out of a catalog, then blaming Fed-Ex for not telling the artist how to paint better. What could Apple possibly have to offer a musician?What iTunes did was monetize the Napster crowd. Likewise iTunes Match is going to give the labels a way to recoup some cash on your illegal downloads. Apple’s 30% cut is better than bit torrents’ 100% cut.
I dunno man. The Who was before my time, but when compared with some indie rock some of their early work holds up surprisingly well. Yeah his attitude, here, sucks but that’s got little to do with the quality of the music. He’s not alone either. How long did it take the labels to capitulate to changing technology? It’s not so easy for giant industries to switch gears. I’m pretty sure the whole idea of big labels is soon to be over — as the means of production gets cheaper and cheaper audio engineers & producers are slowly moving more & more to an independent consulting like business where they contract with artists to produce albums. Big labels aren’t going to be necessary or useful for too much longer. I think that’s probably a good thing.
Yeah — those 11.99 to 13.99 CDs were probably wholesaled around 8.99 to 11.99. Tower and Borders would mark those up to 17.99/18.99 or whatever so they could sell new releases at 9.99 or 11.99 when they were listed at 17-19 or so.
Saying The Who is dated is absurd. I’m 19, and I enjoy The Who. I know lots of people that do.
And using that out-of-your-ass logic, YOUR opinion is just as worthless as Townshend’s.
Hang it up and die with dignity? Really? Go hang yourself up in the the shed with the other tools.
Established bands with devoted followings are the only ones who have
this luxury. Unknown bands still need some sort of promotion and they
need as much exposure as they can get. They can’t afford to only sell
on their own site. Asking potential listeners to go through lots of
extra steps just to buy the music (finding the site, logging in, filling
out payment information, etc) only works when existing fans are
ravenous for what you have to offer (and even then it doesn’t work well
enough to keep the releases from being sold through traditional channels
later on… Radiohead and NIN just being two such examples).
Pffft…Pete…you just don’t get it.
I’m just thankful iTunes brought back the music single (= the “45 rpm” record of old). If singles were good enough for the likes of the Beatles, Elvis and Prince, they’re good enough for AC/DC, Jay-Z and Estelle.
I shouldn’t have to buy an entire album for the one track that appeals to me. Just take my damn $ already!
From NPR’s Planet Money interview with musician Jonathan Coulton:
Jonathan Coulton’s songs almost never get played on the radio. He doesn’t have a contract with a music label. Yet he’s a one man counterargument to the idea that musicians can’t make money making music.
In 2010, Coulton’s music brought in about $500,000 in revenue. And since his overhead costs are very low, most of that money went straight to him.
Did he ever expect to make that kind of money as a musician?
“Of course not,” he says. “This is absurd.”
Walmart, Target, Best Buy etc don’t give the artists any advice and take a percent as well.
And they, not a label are the parallel to the iTunes store.
Even better though is that unlike at the physical store, if you decide that you like that one or maybe two songs enough to want to support the artist fully you can complete your album and just buy the remaining tracks. In the old school you had to buy the whole album over and many didn’t want to rebuy what they had on singles do they didn’t.
And yet they do it. You can sign up without a label, without a service and sell your own stuff right on iTunes. http://www.apple.com/itunes/co…
I have actually helped friends set this up and it’s really very easy. My fee is dinner (often just pizza and beer while we are doing it) and they get the whole 70%.
Big names don’t get that money cause they signed their souls and all rights off to a label who has the power and doesn’t given them snot in sales share. But that is not iTunes fault.
By the time you break it down to the cut the store gets, the cut the service the store uses gets etc the labels probably get about 60-70%. And then they keep the lions share cause they legal own all the various rights and give the artist maybe 5% of the 70% they got
before Facebook, twitter etc I would agree with you. But if you work those tools you can sell yourself very well even off your own site. It’s all about whether you want to do the work
When “record stores” sold products, the record company was paying the cost to produce and transport physical goods. Physical CDs, or vinyl, the packaging materials, the included booklets and liner notes, all cost money, on a per-sale basis, to the record companies.
With iTunes sales, they have no such costs. Whether Apple sells 500, or 500,000 copies of a single, the cost to the label is essentially zero. Apple is covering all of the costs of the bandwidth — which is the modern equivalent to pressing the CDs, providing the clamshell cases, printing the liner notes, and shrink-wrapping the entire thing.
If Pete wants to complain about something, it should be that the record labels are still taking their huge cuts on sales where they don’t produce or distribute anything for an iTunes sale.
Please don’t dis the Who’s music and contributions to rock and roll. They were and are giants. By your same logic, classical music must so dated that it should be banned from ever being performed. There are many musical tastes, and if the Who aren’t among your faves, so be it. I find listening to rap, hip hop, club music and oldtime country music comparable to having my fingernails pulled out, but that’s just me–there are many for whom these styles are the cats whiskers.
I agree that Pete’s logic is flawed and he doesn’t see that it’s the label’s job to nurture the artist (or to do it himself) and not the distributor. He’s unfortunately bought into some record industry exec’s rage that iTunes is cutting into its (the label’s) profits. What I’d be interested in is if the label is reducing the cut it gives to the Who because it’s making less per CD sold.
Yep. The only thing, as much as I love apple, we should worry about is a potential monopoly on the means of distribution. Apple’s influence over price points and % cuts is a double edged sword. I’m pretty happy that it’s been mostly good for the consumer so far, though.
iTunes doesn’t get my business for anything but their exclusive releases because I can’t bring myself to give up lossless quality yet. So I still spend a lot of time looking for places selling FLAC or ALAC files or looking for used discs. I still have the endless project of ripping all the discs I built up during my record store days… though I’d rather have the option & convenience of being able to purchase them in the quality I want from iTunes because ripping and tagging is a PITA.
It is none of Pete Townsend’s business what Apple gets per sale; that is a contractual matter between the record labels and Apple. Pete’s contract is with his label. It’s his job to negotiate with the label for what he considers to be fair compensation for his work. It’s the label’s job to negotiate, or not, a contract with Apple for digital distribution.
What’s hurting most artists is the re-emergence of the single through online sales. Now they can’t get away with producing two or three hit tunes and six or seven pieces of tripe and get $15 from a consumer buying a CD.
I have confidence in the Federal Trade Commission and the power of the marketplace to deal with any such hypothetical abuses.
I’ll worry if Apple starts demanding special, right-wing-Christian-approved censored versions of songs the way that Walmart does.
The latter would be worse, yeah. I guess we just differ in that I don’t have a lot of faith in the power of the marketplace to limit monopolies in all cases or that the Fed will generally do the right thing. But that’s just me. =)
It is much cheaper to do it themselves than through the RIAA channels… The added costs of those deals often lead to negative earnings. TLC, after selling millions with their “Waterfall” song are famous for also owing… OWING their label about $250,000 AFTER their album sold millions.
There are many groups with dedicated followers… MIRV, unfortunately, is no more… No label would take them, but their concerts were great! Too bad they didn’t try the website marketing route. Gigs and word of mouth were their best tools. Sammy Hagar started similarly too. All small names with good followers, playing in small dives. Graft. hard work! That’s how they made it.
Back before the Internet, getting noticed by people on the other side of the country, let alone the world, was almost impossible. Glenn Miller had to travel across the country to get noticed.
Today, it’s easier to get a message to someone on the other side of the country, but the music industry is not really that helpful. They use the same methods developed for music distribution back in the 50s, and they refuse to change. Many up and coming artists have gotten, and get run over by the RIAA. Joe, vs R. Kelly.
While I agree the steps to record sales on a personal website can be off-putting for some customers, it’s been really successful for many artists. Ani DiFranco…
The Morgan? Yea, let’s whine and aske one of the top 2 or 3 guitarists and rockers of all time, “What have you done for me lately?”
This guy’s a moron, artists don’t die of iTunes, they either get killed, overdose, or commit suicide. iTunes isn’t the only median out there, yeah it’s big and if your music doesn’t shine compared to the others then there’s nothing wrong with iTunes, it’s your music.
Never underestimate the will of cheap consumers in a bad economy. If Apple’s prices for music go up, consumers will buy elsewhere. Just ask Netflix how well price hikes are received by today’s consumers.
People make music because of money, and that is not good.Get your self a job Mr. Big Nose.
Very true (and a feature, I’m ashamed to admit, I forget about often)!
I also find more music I like this way. Instead of being at the whim of my local music-selling bookstore or big box store offering “listening stations” with a small music selection, I can listen to samples of any song in iTunes. Furthermore, iTunes does a decent job of pointing me to related/similar musicians.
I guess that’s why they sang “I hope I die before I get old”. They end up becoming out of touch with reality.
Still love your music Pete but you have long since lost your place with the everyman.
Also not forgetting Apple is also paying for the card transaction fees. As I understand the 30% more or less like you say covers the cost of the operation, with a few pennies as profit.
I don’t think Townsend can complain too much if he actually knew how little Apple makes in profit from iTunes sales alone.
There are a number of problems with Peter’s statement, the most obvious which John has already addressed, what it appears that Peter fails to take into account that Apple provides through iTunes is that:
– Apple acts both as distributor and retailer removing one more step in the supply chain
– The channel doesn’t require the physical production of media, another overhead removed
– Apple has the biggest customer base in the world of any music store — think of it as your one-stop-distribution-shop, again reducing overheads that would normally be spent negotiating with multiple distributors
– The discoverability of new music and potential for inter-label cross-promotion has been hugely increased, result in greater sales
– Lastly, Apple does provide feedback to artist via data on number of sales, previews, traffic, customer spending , etc… which in turn may be used by the labels to ‘nurture’ their artist, eg: ‘make more like this’
The vast majority of people want one stop shopping. One credit card on file, one store. If an unknown artist is happy taking selling 500 copies of their albums (and Ani DiFranco is hardly “unknown”) just so they can keep most of the money when they could be selling 20,000 copies and getting less per album but infinitely more exposure then I guess that’s their prerogative. It’s not a wise business move since albums are now considered marketing to get people to come see you live (where you make the bulk of your money). Recordings are now table stakes, a necessary expenditure.
If what you’re saying is true, then there should only be one single online store, and you know that’s far from true. There are millions of websites, and millions of them take credit cards. And people pay using credit cards. How you can ignore the fact that e-commerce is a thriving platform for small businesses growth is amazing.
And let’s talk Ani DiFranco… What record label did she sign with originally? HER OWN!!! Was she some super-popular record artist when she started in 1989? I think not! Yet, without signing up with a big record label, now you can say “(and Ani DiFranco is hardly “unknown”).” Ani DiFranco is the poster-child for record label independence! And how did she start? By playing small gigs in local bars, the same way Sammy Hagar started.
If you think that selling 20,000 albums is going to put a single dime in an artist’s pocket, you have a lot to learn about the recording industry. 200,000 albums sold is below the break-even threshold for recording artists.
And then you say:
” It’s not a wise business move since albums are now considered marketing to get people to come see you live (where you make the bulk of your money). Recordings are now table stakes, a necessary expenditure.”
Albums have ALWAYS been marketing tools to get people to come to see live performances. In the 50s, Frank Sinatra had commented (can’t find the reference) that he didn’t care about record sales. He cared about concert ticket sales. That’s where the money was. He sold millions of albums in those days, yet his main concern was concert tickets.
And in those days, artists could not expect to make anything from album sales. They just hoped that enough people would like their music to go to concerts.
The cost of producing records and tapes was prohibitively high. Specialized printing presses and duplication machines were required for production of even a small number of copies. No artist could produce his own albums then.
It wasn’t called a record “industry” for nothing. There were factories producing them. And the record industry kept all of the money from sales, unless your were HUGE. But even Frank Sinatra (probably the biggest seller at the time) didn’t care about record sales.
Before the CD, music sales were all about marketing.
The CD allows independence, much to the chagrin of the record industry.
The record industry thought CDs were simply going to lower their production costs, increasing their profits. With the instant price-hike at their introduction, it certainly did. It also had an unfortunate alternate effect. Freedom from their tyranny.
Ani DiFranco knows this well.
It wasn’t until the CD was introduced (and DAT), that small artist could easily afford to produce enough of their own copies. Sure, some (MC Hammer) were making tapes, but CDs were cheaper to produce. As time went on CDs overtook all other distribution methods, and due to its digital nature, CD duplication costs went through the floor.
Despite the fact that album duplication now costs mere pennies for 1000 copies, and can be done effectively with cheap off-ths-shelf equipment, the big record labels STILL take the lion’s share of the ever increasing price of albums, while making claims of supporting their artists, etc. Rubbish!
And, as I said in my last message, the record industry has destroyed many. Joe was one example. Eric Roberson. And then there was up and coming Candlebox. They couldn’t get any radio play, nor on MTV. Why? Record execs wouldn’t let them.
Many recording artists have been quite vocal about the practices of the record industry. Too bad that message is being drowned out by the mighty marketing arm of the RIAA.
I cannot see how anyone can stand up for an industry borne on the blood, sweat and tears of those who they claim to support. It had its place long ago, but digital audio, the Internet, iTunes and others are helping the small artist a hell of a lot more than the record industry wants to.
I suggest you take a look at some record artist royalty payment statements. Marvel at the fees that suck up all the royalties, and in many cases leave the artist owing. As did TLC (mentioned earlier).
Just like with books, the majority of the costs associated with releasing an book/album has never been the physical product. I’m sure the record companies are still making a healthy profit (much more healthy than the artist’s) but marketing and promotion are still necessary in the digital world.
Thanks for having a better understanding of the business model than Mr. Townshend. If you keep making valid points like this, I don’t want you dying before you get old. Love the Barnes & Nobel example.