My sister’s oldest daughter is a successful music writer here in Los Angeles. She got to ride around on Rihanna’s 777 plane last year, goes to all of the big music events and festivals and gets opportunities to hang with the big stars on occasion. She wrote a review of the solo Neil Young concert the other day and posted a note on her FB page. That’s how I hear about it. Who knew that Neil was doing a nationwide tour by himself? You can read her article at the Hollywood Reporter website.
I actually secured a couple of tickets for the show this evening…a sort of self-funded post birthday present. You’ll be able to read my review tomorrow. The kind of performance that Neil is doing this evening would make a perfect high-resolution 3D Blu-ray disc. I’m sure they’re recording all of the shows but I doubt they’re doing it with fidelity in mind. We’ll see what becomes of it. For those of you who have heard my recording of John Gorka singing “Italian Girls”, you know what’s possible with the right motivation and techniques. Just imagine a solo Neil Young concert recorded that way!
As I was reading the review by Emily Zemler in the Hollywood Reporter, I noticed a link to another article about the Pono KS campaign entitled, “SXSW: Neil Young Introduces Ponos to the World — While Its CEO Raises Some Eyebrows“. The “raises some eyebrows” made this a definite read.
After the normal Neil speech about getting back to the “soul of music” and the magic of 192 kHz/24-bit PCM, a member of the audience asked CEO John Hamm, “What’s your cut?” To which he responded, “It surprises most people that everyone who buys music from the record labels pays exactly the same amount.” This was the moment that things fell apart and the Q&A session abruptly stopped, according to the HR piece.
As someone that has spoken to the major labels and has actually seen the deals that are offered to high-resolution music download sites (including the upcoming Ponomusic.com project in October), I can tell you that John Hamm was exactly right when he responded.
Apple’s iTunes set the “distribution” percentage at 30%. When I get a monthly statement from iTunes, Apple keeps 30% of every dollar. By way of comparison, when I sell a Blu-ray disc through Amazon, the distributor and Amazon keep 55%…a much steeper cut.
It’s kind of like Tesla selling their cars directly to consumers (except in New Jersey and a couple of other states, which require you to purchase cars through dealerships). The people making the records or cars always do better selling directly. That’s why I encourage my customers to purchase from AIX Records and iTrax…I become the retailer and get to keep more of the money.
In fact, iTrax pays our affiliate labels between 70-80% of every dollar. The distribution percentage seems reasonable to me…and I think Apple and iTunes are pretty much in line. The labels and artists are getting a much better deal from them than they are from Spotify and Pandora.
But when John Hamm says that “everyone who buys music from the record labels pays exactly the same amount”, he’s right. The major labels have licensing departments and they are making deals with HDtracks, SuperHiRez, HighResAudio and Ponomusic at exactly the same amounts. I’m sure some of the advances and guarantees are different but they control the cost of the content. How much Pono or HDtracks puts on top of those amounts is up to them. But there is tremendous pressure to keep the money flowing back to the labels because the deals mandate a certain minimum guarantee. That’s part of why I can’t go there.
How many “high-resolution audio” download sights can the business sustain…especially if 90% of the content being offered isn’t high-resolution but merely transfers of CDs or third generation analog tapes? That’s why iTrax will offer limited content but all of it at reference quality personally verified and approved by myself.