Digital Music News has posted some charts from Chuck D.’s lawsuit of how UMG calculates artist download royalties. According to these charts, a UMG artist is paid $0.08 on a $0.99 download. Why is this so low? Part of the reason is that UMG takes a “container charge” deduction for these downloads. A container charge is basically code for a “packaging deduction,” or in other words, the deduction labels would take for the cost of packaging (jewelcases, etc.) on actual physical product like CDs. Why is UMG taking a packaging deduction on digital downloads that have no packaging? Because they can. They also take several other bogus deductions to make this entire calculation ridiculous. I’m not saying every UMG deal is like this, but at least this one is.
On the other hand, artists distributing through TuneCore get $0.70 on a $0.99 download.
And people wonder why my clients like to be, and why I advise them to be, DIY.
View the accounting charts here.
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