Big labels are f*cked, and DRM is dead - Peter Jenner
Clash, Pink Floyd manager lifts the lid
Then you've got people like Barney [Wragg] at Universal, their new technology man, and they've got these High Priests of DRM in there.
One thing you strongly hint at is that the distinction between royalties for a physical thing, and performances, is out of date and needs to be rethought.
The difference between a download and a stream now is now purely just a question of what you want to call it. Both are streams, both can be downloaded and it's whether you want to call it a download and charge for a download.
The record companies have managed to establish, and I think incorrectly and it should be challenged, that a download is a replacement for a sale. Here's what they're saying - it's a mechanical, so it's the same as selling a record. Then the logic goes on: a download is a certain technical process that puts it onto your machine. So anything which does that is a download. Therefore, anything delivered in that way is a sale: so we'll pay you as a sale.
Which then means you've got to track everything. It's not discriminating - it's not looking at what people are using the music for. It's creating an artificial distinction so they can distinguish the payment of royalties. So you get paid 15 per cent of the dealer price net of some things - whether they call it "packaging deductions", or "new technology", or "Mid-Price", or some combination of those.
They have all sorts of ways of slicing down the royalty rate. And the net result is that if you're getting only five per cent of the dealer price actually paid to you - as the person who made the record - you're doing well. The writers, because they've got the publishers fighting for them, get more. They went to tribunal recently and got eight per cent of the dealer price. So if you wrote your own song you might get 11 per cent of the dealer price, and that's top money. If you allow for the Paul McCartneys, maybe 15 per cent. But that's tops for a big label.
Now, if you're an independent, you get in the region of 35 per cent of the dealer price, because they go 50/50. And that's what gives the game away.
And all your net is a payment to an aggregator - maybe 15 per cent, and paying the distributor, and paying the publisher. So instead of five per cent of dealer price you're going to get maybe 20 per cent of dealer price. It's a huge difference!
If you say it's a performance, however, it's a neighbouring right, it might be argued that it goes through PPL, in which case you get 50 per cent with many less deductions. So a performance split between members of the band, sessions musicians - a complicated formula but it goes to the musicians.