What’s at stake isn’t so obscure. Record labels pay between 10 and 20 per cent in royalties to musicians for sales of their music. But they pay as much as 50 per cent when music is licensed, when songs are used in films or ads, for example. The royalty rate for music sales has historical roots in the costs the labels assumed for pressing records and CDs, transporting them to shops and promoting them. So why, the talent argue, should the labels get the same rate when the bulk of those costs are gone?
The labels, unsurprisingly, want to continue classifying downloads as “sales”. Insiders believe iTunes and the like are simply record stores without the bricks-and-mortar, a continuation of the core business of selling recordings. Also they are still manufacturing CDs, which made up more than half of global sales last year. And promotional costs haven’t disappeared; indeed, promotion in the digital age makes the old days of keeping fan clubs happy with signed photos look like child’s play.
