Lady GaGa digital royalty statement mold of last week. It's a great post from the band Too Much Joy regarding a royalty statement they received from Warner Records shown on the left.
The band owes Warner's in excess of $395,000 in order to recoup the costs of doing 3 records for the label in the early 90's. That's a large amount of money, but not the item that makes the post interesting.
The interesting part is the fact that the band received only $62.47 from digital earnings. Now you might think to yourself that this is perfectly reasonable, given the fact that the albums are more than 10 years old, except for a couple of things.
Tim Quirk, one of the members of Too Much Joy, is VP of Programming for the streaming digital music service Rhapsody, so he knows exactly how many plays they received and how much money was paid to Warners. The band also knows that they've received more than $12,000 from digital sales for their 4 indie albums, so why shouldn't their 3 major label releases earn more than $62.47 (this was their first accounting ever for digital sales)? And finally, there are no earnings from iTunes in their statement (the other pages are not posted, but they indicate in the post), the largest digital retailer of them all.
When Tim actually calls Warner's for an explanation, he get comments like "we have to take care of R.E.M and the Chili Peppers first," "$10,000 is nothing!" and "Too Much Joy never made us shit!" But yet Warner's owes the band a full accounting according to their contract (and every other), regardless of how upside down they are. After all, how do you know who owes who unless you get a full accounting?
With an attitude like that, it's no wonder why bands stay as far away from a label as they can in the new Music 3.0 world. Why bother? They once served a purpose in that you really needed them to bankroll your recording. You needed them to distribute your music and promote it too. There was no way you could do it by yourself.
Until now, that is, because the world has changed. You can make your own music for mere thousands of dollars instead of hundreds of thousands, and you can market, promote and sell your product just as well as any label can online (but not traditionally), and potentially make a lot more than $62.47 as well. At least you won't end up owing hundreds of thousands of dollars with no hope of every recouping.
Check out the full article on the Too Much Joy blog site for a good read with a lot more details than given here.