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Digital Audio Insider is David Harrell's blog about the economics of music and other digital content. I write from the perspective of a musican who has self-released four albums with the indie rock band the Layaways.

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June 22, 2006

Nickeled and Dimed
by David Harrell
Nickeled and Dimed
Money managers sometimes use the mantra "maximizing shareholder value" when talking about the desired traits of stocks they want to buy. That is, they want to own the stocks of companies that have management teams that are committed to running their businesses in such a way as to maximizing the return to the investors who buy the stock.

Makes perfect sense from an investment standpoint. But when you apply that maxim to a publicly-traded record company, it sure doesn't seem to result in artist-friendly business practices. Does "maximizing shareholder value" also mean "minimizing artist income" for the musicians on the label?

From a recent Wall Street Journal story on the "new" Diana Ross album:
Diana Ross's new jazz album isn't exactly new -- she recorded it about 35 years ago.

But there's something decidedly contemporary about the CD, which goes on sale June 20 (it's already available at Starbucks). It's part of a new wave of old music, as a sales-starved industry scours its libraries for old or unreleased material it can spin into easy profits.

In 1972, Ms. Ross was riding high on the release of her Billie Holiday biopic "Lady Sings the Blues," for which she later received an Oscar nomination. In conjunction with a movie soundtrack composed of pop-influenced renditions of Billie Holiday tracks, Ms. Ross also separately recorded purer jazz versions of the same material, along with some standards. But according to Universal Music Group, which now owns Motown, the jazzier versions, arranged by Gil Askey, were rejected because the label wanted her to work on more commercial releases.

Now the economics are different. It usually costs less to hire a "vault asset specialist" to find previously recorded tracks from an existing performer than it does to record new songs or market a new artist -- especially when established musicians can be paid royalties on old music at the lower rate they typically would have been paid when it was recorded. (Universal declined to comment on Ms. Ross's royalties, but her business manager says her deals have been renegotiated several times since 1972.)

full article here (scroll down to "music")
If I were a shareholder of Vivendi, which owns Universal Music, I suppose I'd agree that paying Diana Ross the smallest possible royalty was good for the bottom line. And Ms. Ross probably isn't anyone's first choice as a poster child for starving musicians who've been deprived of their rightful royalties.

Yet there seems to be a basic lack of fairness here, if Universal is indeed paying 1972 rates for something released in 2006. Granted, Universal is dropping some bucks on the promotion of this album, mixing it, mastering it, etc. But these recordings have basically been gathering dust for 30+ years. Seems like any income from them in 2006 would be considered pure gravy from an accounting standpoint, not a reason to pinch pennies on artist royalties.

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    THE LAYAWAYS

    Out Now -- "Maybe Next Year" -- The New Holiday Album:

    <a href="http://thelayaways.bandcamp.com/album/maybe-next-year">Joy To The World by The Layaways</a>

    "This is a sweet treat, deliciously musical without being overbaked for mass media consumption." -- Hyperbolium

    "Perfect listening to accompany whatever holiday preparations you may be making today." -- Bag of Songs


    O Christmas Tree - free mp3 lyrics and song details
    Away In A Manger - free mp3

    Download from eMusic, iTunes, Amazon MP3, or Bandcamp. Listen to free streams at Last.fm.



    album cover art from The Space Between

    <a href="http://thelayaways.bandcamp.com/album/the-space-between">Keep It To Yourself by The Layaways</a>

    "...about as melodic and hooky as indie pop can get." -- Absolute Powerpop

    "Their laid-back, '60s era sounds are absolutely delightening." -- 3hive

    "...melodic, garage-influenced shoegaze." -- RCRD LBL

    Where The Conversation Ends - free mp3
    January - free mp3
    Keep It To Yourself - free mp3

    Download from eMusic, iTunes, Amazon MP3, or CD Baby, stream it at Last.fm or Napster.



    album cover art from We've Been Lost

    <a href="http://thelayaways.bandcamp.com/album/weve-been-lost">Silence by The Layaways</a>

    "The Layaways make fine indie pop. Hushed vocals interweave with understated buzzing guitars. The whole LP is a revelation from the start." -- Lost Music

    "Catchy Guided by Voices-like rockers who lay it on sweetly and sincerely, just like Lionel Richie." -- WRUV Radio

    Silence - free mp3 lyrics and song details
    The Long Night - free mp3

    Download from eMusic, Amazon MP3, or iTunes, stream it at Last.fm, Napster, or Rhapsody.



    album cover art from More Than Happy

    "These are songs that you want to take home with you, curl up with, hold them close -- and pray that they are still with you when you wake up." -- The Big Takeover

    Let Me In - free mp3
    Ocean Blue - free mp3

    Download from eMusic, Amazon MP3, or iTunes, stream it at Last.fm, Napster, or Rhapsody.

    More Layaways downloads:

    download the Layaways at eMusic download the Layaways at iTunes

    the layaways website