What makes it fascinating is the writer, Tim Quirk, used to be a musician (hence the royalties) and now works for an online music service (hence understands how much is actually paid to record companies). He knows when he's been had. The comments are also interesting, with several explanations of how all this stuff is supposed to work.
I thought writers had it bad, but since writers' contracts are for one or two territories, one edition of one piece of writing, it's fairly easy to keep it straight in your head what your advance was and why, in almost all cases, you're never going to see another penny. Music publishing is so complicated that it appears no one can fully understand it.
Tim Quirk hassled the record company into actually providing him a statement for his online royalties, because, you know, they don't usually bother to send them to musicians.
So I was naively excited when I opened the envelope. And my answer was right there on the first page. In five years, our three albums earned us a grand total of… $62.47.
What the fuck?
I mean, we all know that major labels are supposed to be venal masters of hiding money from artists, but they're also supposed to be good at it, right? This figure wasn't insulting because it was so small, it was insulting because it was so stupid.
Tim's band is "unrecouped" (the record company claims to have spent more money on them than they have earned) to the tune of $395K. Unrecouped bands obviously aren't paid royalties - that money goes to the record company to pay off the up-front costs. (But not at the rate of 1 album sold = 1 album's profit subtracted from the balance - Tim discusses this.) However, if the royalty statements are incorrect, then chances are the accounts will never get in the black, so accounting has to be meticulous. It wasn't.
I asked Danny [from Royalties and Licensing] why the statement only seemed to list tracks from two of the three albums Warner had released – an entire album was missing. He said they could only report back what the digital services had provided to them, and the services must not have reported any activity for those other songs. When I suggested that seemed unlikely – that having every track from two albums listed by over a dozen different services, but zero tracks from a third album listed by any seemed more like an error on Warner's side, he said he'd look into it. As I asked more questions (Why do we get paid 50% of the income from all the tracks on one album, but only 35.7143% of the income from all the tracks on another? Why did 29 plays of a track on the late, lamented MusicMatch earn a total of 63 cents when 1,016 plays of the exact same track on MySpace earned only 23 cents?) he eventually got to the heart of the matter: "We don't normally do this for unrecouped bands," he said. "But, I was told you'd asked."
What this seems to mean is "if we aren't in the black, we don't do any work to find out if people are paying us". But if they aren't recording the payments, then the account will never get in the black!
I work with medical databases and this looks to me like the standard database issues rather than bloody-mindedness. OK, a bit of both. Big databases are always utter crap. They are only as good as the data going in (and it's often crap even at that point), and the data continues to degrade all the way through the system. Name spelled one way in one database and another way in another database? The records don't match. Do you get paid twice or not at all? I'm guessing not at all. Queried another database using a data string with a missing or extra space? Your name won't come up on their records. Got a non-alphanumeric keystroke in your data entry by accident? Could be a field terminator marker that puts the next million entries out of sync with the database fields they are looking at and nobody gets paid for anything entered that day. Someone typed in 35.7143% from someone else's contract instead of the 50% that was on yours? Who would ever know (unless you check your own statement)? Someone OCR'd a record and it was misread by the software, or the back of the record was scanned instead of the front? And so on. This is one reason why the Big National Database of The Government Knowing Everything About Everybody in Order to Stamp Out Terrorism won't work. The data is too dirty and can't be cleaned.
Still sucks to be a musician, though.
In other news of record companies' attempts to not pay anybody, artists have put together a class-action lawsuit claiming they are owed between $5M and $6B - yes billion - that record companies haven't bothered to pay. (Story at Ars Technica.) It seems that there was a change in Canadian laws in the 1980s which allowed record companies to use a song (say for a greatest hits album) without first getting a compulsory license, if they promised they would go then go out and get authorization afterwards. Of course, once they had used the song, the relentless urge to spend the time and money necessary to find the artist, get authorization and pay him or her sort of died away. The $50M figure is the estimated sum artists are owed. The $6B figure is what artists would be owed if the labels were asked to pay $20K per infringement - the figure labels try to screw out of individual file-sharers, or pirates as they are known.
Speaking of pirates:
Entertainment Industry Leaned on Los Angeles Politicos to Declare Piracy a 'public nuisance'.
UK government uses 136 survey respondents to handwavily declare there are 7M file sharing infringers.
The Guardian Bad Science blog looks into the "estimated costs" of music downloading and finds them bogus.