Wolfgang’s Vault and Transparency

I’ve long been saying that there needs to be transparency in the music business; that is, performers, fans, etc. need to know how the money is flowing. I believe that if more people knew that a decent percentage of the purchase price was going to the artist they care about, they would be far more predisposed to pay (I’m not naïve; I don’t believe that all people would pay, but I do believe more would pay).

To wit, I’m very glad to see Wolfgang’s Vault (a site I’ve mentioned before) spell it out clearly and simply on their web site. Here’s how they roll:

Since we started selling downloads, a number of people have been asking us what the performers are getting paid. This is a critically important question and one that we are happy to answer. You see, at Wolfgang’s Vault we recognize how important the artist is and how important their music is to our lives.

Based upon all the information that is available to us, we believe that performers can earn between four and six times more from Wolfgang’s Vault per download than they currently receive from their record companies. In a well publicized dispute between performers and major record labels, the performers state that they typically earn only $.045 per downloaded song – less than 5% of the total per song download price.

The Wolfgang’s Vault agreement pays the performer significantly more, remits the money much faster and gives the performer the tools to review download sales activity in real-time. For example, assuming a price of $9.98 for each concert downloaded from the Wolfgang’s Vault website, our payment and reporting structure would be as follows;

1. Thirty percent (30%) of the download price goes to Wolfgang’s Vault to cover manufacturing cost, distribution expenses and credit card fees. Our manufacturing costs include repairing and restoring the audio tapes – many of which are more than 35 years old, transferring the original concert tapes into a high-end digital format, mixing and mastering the music using some of the very best engineers available, tracking the concerts (naming songs and creating breaks between songs), setting up online real-time reports for the performer and researching and writing concert descriptions. Distribution expenses include website development, operations, maintenance, hosting and bandwidth.
2. From the remaining 70% of the download price, the songwriter is typically entitled to receive a publishing royalty of $.091 per song for the use of the song itself.
3. After paying the publishing royalty, the remaining proceeds from the download price are split 50/50 between the performer and King Biscuit Records. There are no marketing, free-goods or other deductions.
4. For a typical 12 song concert, the performer would receive a payment of about $.25 per song. If the performer was also the songwriter, this payment would be $.341. At the low end, the performer would receive a payment that is nearly six times the payment they claim they are currently receiving from the major record companies for a similar download.
5. In total, for each 12 song concert, the performer would receive almost $3.00 and more than $4.00 per concert if the performer was also the songwriter.
6. The performer is paid monthly, within 10 days after the end of the month. A reconciliation statement accompanies each remittance. All payments to performers include interest at the 90 Day T-Bill rate, calculated from the moment the performer’s share is received by Wolfgang’s Vault until it is paid to the performer.
7. The performer has access to secure online reports which detail up-to-the-minute download sales.
The only exceptions to this payment and reporting structure are concerts that were subject to agreements executed many years ago. All new concerts would be subject to the current Wolfgang’s Vault agreement.

I sincerely hope this becomes the trend.

[Please note, in the interest of my own transparency, I do some work with Wolfgang’s Vault.]

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  1. Jennifer Licko’s avatar

    Great to read this blog after learning about the flow of money in class. Thanks for posting!



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