How much can artists expect to benefit from Microsoft’s Zune MP3 player?
Microsoft recently agreed to pay a royalty to Universal Music, which with acts like U2 and Jay-Z is the world’s most successful label, of more than $1 for each sale of each Zune sold.
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Universal promised it would “pay half of what it receives on the devices to its artists.” But is that really going to happen? Given my experience, I’m skeptical.
Record companies pay royalties on record sales, and licensing. Generally the royalty for sales of records is 10 to 15 per cent of the retail price, but it can be higher for established stars. Traditionally, the split on licensing is 50-50. Licensing applies to transactions for the use of musical recordings that do not involve sales, such as the use of masters in television and movies.
For digital music distribution, iTunes pays the labels approximately 70 cents.
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