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Pete Townshend  (Source:

  (Source: Spill)
Townshend said iTunes profits from music without giving back to the artists that work to create it

Remember when Metallica launched a legal battle against Napster back in 2000, then criticized the iTunes Music Store a few years later for destroying the album format and refused to allow their songs to be sold individually in the online store? Well, Metallica may have gotten over its spat with iTunes by releasing its songs in the store in 2006, but that doesn't mean iTunes now holds a loving relationship with all of its artists.

Pete Townshend, the guitarist and songwriter for rock band The Who, called Apple's iTunes a "digital vampire" while delivering the first John Peel Lecture, which was named in honor of the late British radio broadcaster.

Townshend said iTunes profits from music without giving back to the artists that work to create it. He offered some suggestions for iTunes, such as offering artists services that music publishers and record labels once provided since the Internet has eliminated many copyright protections. Some services Townshend mentioned were space for bands to stream music, employing talent scouts, and paying smaller artists directly without the use of a third party.

Townshend said iTunes bleeds artists like a digital vampire, and offering these services is the least it could do.

"It would be better if music lovers treated music like food, and paid for every helping, rather than only when it suited them," said Townshend. "Why can't music lovers just pay for music rather than steal it?"

Back in May of this year, the Recording Industry Association of America (RIAA) scored $105 million in a lawsuit against Limewire, which was a free peer-to-peer file sharing program similar to Napster, and was accused of giving none of the money to artists. It was later discovered that the RIAA planned to set an unknown amount aside for artists.

Source: MSNBC

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RE: confused much?
By messele on 11/1/2011 1:30:35 PM , Rating: 3
This is where it becomes tricky, and new young artists only have themselves to blame here.

These days it's commonplace for the record companies to find new talent and sometimes they will take a gamble on them based on their A&R expertise, which is more about marketing an image than the music itself but bear with me.

The artist cannot leave a meagre lifestyle waiting for their music sales to snowball so the studios draw up deals whereby the artist is contracted to supply X number of albums or Y number of singles in exchange for an advance.

This allows the artist to hit up their dream lifestyle with money that's not been earned. The record companies in turn have an immediate benefit that the artist is living the improved lifestyle, getting out there, getting noticed, getting into trouble, whatever it's all good PR.

The label has taken gamble, sometimes it pays off, sometimes they lose big time and the artist amounts to nothing but they are no fools, in general they are always up on the deal. However the if the artist sells well they will not get as much as if they'd waiting for the money as the advance has to be financed and nobody is going to do that for free right?

None of this has anything to do with the retailers (hello iTunes) who traditionally purchased stocks for their physical stores, sat on that stock for however long it took to shift it and made their profits. Retail margins (GROSS margins) are generally more than 30% since they needed to finance physical distributions and retail stores have BIG overheads.

iTunes has simply replaced everything from the CD pressing plants, through warehousing, distribution and retail. All of their money travels back up the chain, none of it goes direct to the artists. That's the label's contract. It's known from Apple's earnings reports that 30% gross profit equates to a slither of nett profit, so presumably offering a high quality service is not cheap since they do shift a lot of music.

We all know that Apple do not care about this as they are in it for the hardware sales that inevitably result. So far everybody is happy, I think.

You'd think Pete Townshend would know this and also the fact that he wrote most of The Who's music himself and therefore takes the all of the cash for that himself (often the lion's share) means he continues to do very well. The money he gets for selling a album on Amazon digital is EXACTLY the same as Amazon selling a physical CD.

In mind of these generally new artists these days, certainly those in certain genre's do not write their own music, often do little other than perform the vocals. They will not be nearly as richly rewarded for this.

Finally, the contradiction regarding the illegal and legal aspects are bazaar. Can't even get my head round what he's on about there.

"I'm an Internet expert too. It's all right to wire the industrial zone only, but there are many problems if other regions of the North are wired." -- North Korean Supreme Commander Kim Jong-il

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