The transition to the digital marketplace has been extremely difficult for artists in the music world. Many people have not realized how the increase of technology has skewed the way music is bought and downloaded on the internet, and what the consequences would be for the artists themselves. With regards to compensation, the Future of Music Coalition (FMC) has looked into how various artists and performers get paid.
Before iTunes, artists were bound into contracts with the label. However, now that there are many places for the song to be sold to, the artists are not making half as much as the label is making. There is a very large gap between the "sale" and "license" royalty rate. This is because "a 'sale,' in the language of recording contracts, has historically been reserved for physical copies of a record or single, which have significantly lower royalty rates than 'licenses.'"
Sister Sledge, Eminem, Rob Zombie, and others have had issues with how royalties are computed for digital music. Sister Sledge, for example, is the musical group whom is best known for it's 1979 release and single "We Are Family". The group is arguing that the label, the Warner Music Group (WMG) has violated the terms of it's contract. Their reasoning is that the label counts downloads as "sales" rather than "licenses", which have a much higher royalty pay. However, WMG believes that there is a distinction made, that digital music purchases should be defined as sales, not licenses. Sister Sledge also claims that because WMG now distributes their music to places "such as iTunes under a license, they should then honor "license" royalty rates to artists". In other words, there is a double-standard in how far royalties extend, and Sister Sledge believes this is intentionally done by the record label.
I agree with Sister Sledge, and other artists fighting this, and the artists should be compensated for the money being made on iTunes and other downloading sites. However, I also think with the increasing technology in the music industry, it is impossible to make a switch without something not being compensated for. Although I believe the record labels should compensate the artists, I also believe that the artists need to give the record labels time to catch up with the technology. Clearly, the transition to the digital marketplace will continue to be a difficult one.
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