Suppose you write a song, a truly great song. One that stays in people's minds for years and years, that countless recording artists cover, that bands play in your local bar and you hum while you're in the shower.
A song like Like a Rolling Stone, Satisfaction, Imagine, What's Going On?, Respect, Good Vibrations, Johnny B. Goode, Hey Jude, Smells Like Teen Spirit, or What'd I Say? (List courtesy of Rolling Stone magazine.)
How much should the writer of such a song get paid for such an amazing contribution to popular culture?
Let's look at it another way... how much should the record company get paid for their part in allowing that song to take its rightful place in popular culture?
Well, let's look at iTunes where the price of music is strictly regulated...
An iTunes download costs 99 cents in the USA. Currently the songwriter should receive the statutory royalty rate of 9.1 cents per download.
9.1 cents is less than 10% of the price of the download. So apparently 90% of the value of the download is in things other than the song!
OK, so the performer needs to get paid too. That's reasonable, and their share will be negotiated as part of their deal with the record company. That could be around 8.4 cents. The producer might receive around 2.1 cents.
However, that means that people other than the songwriter, artist and producer are getting three quarters of the money!
What the hell are they doing to earn that?
Let's go back to the poor old songwriter, slaving for a paltry 9.1 cents.
Guess what... the RIAA wants to reduce that to 8%. And not 8% of the 99 cents retail price of the download, but to 8% of the wholesale price of around 70 cents.
So the songwriter will get just 5.7%. Everyone else will share 94.3%!
Remember that the RIAA works for the record companies, not for songwriters, artists or producers.
Oh, and Apple - the company behind iTunes - would like to see the songwriter's cut shaved down even further, to just 4%. And that's 4% of wholesale.
So the songwriter will get less than 3 cents per download. 96 cents will go to all the rest.
How on earth did we get to the point where songs that provide such a huge contribution to culture are considered to be almost worthless?
And what can we do about it?
Please note - Since this article was first published, a number of people have confused the songwriter's royalty with the payment that an independent artist would get from iTunes.
As an independent artist, you will get a much better deal from iTunes. However, if your song is covered by an artist signed to a major label, then the figures given above will apply.
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