"Sale prices and royalties have gradually been eroded to the point where an artist needs to sell in excess of 1.5 million units before they can show a profit, after paying for recording time and tour support," Jazz Summers, the manager of the Snow Patrol, and chairman of the Music Managers Forum, told the Times.
The MMF represents artists that play on a recording in the UK, as opposed to songwriting royalties, which are managed by both the Mechanical Copyright Protection Society (MCPS) and the Performing Rights Society (PRS).
The most interesting aspect of this complaint is that the MMF appears to be targeting Apple — the operator of the iTunes Music Store, the worldis largest online music download service — because the company has dictated pricing on singles to be 79 pence across the board in the UK (US$.99 in the U.S.)
Itis the percentage the artists are paid that is at issue, however, a percentage of 5.7 percent. This percentage is lower than the 12 percent those same artists would be paid for the sale of a physical single.
The difference is due to a "new technology" discount that was intended to address CD packaging costs, but UK labels have used it to pay artists less money for digital downloads, even though the labels make more in profit for each download than they do for a comparable CD sale.
The report compared the dispute to one between the MCPS and the PRS, which also wants an increase in its digital royalties. The article said that the British Phonographic Industry, a label trade group, and Apple have challenged the effort.
The Music Managers Forum is backing the MCPS/PRS alliance in that dispute. "The BPI is jumping into bed with a group of digital music retailers, which are in the process of eating our lunch," Mr. Summers of the MMF said.