The new digital detente between the labels and emerging digital distribution companies has a sting in its tail, The Independent warns this morning.
The record companies are taking such a huge slice of the digital pie that operators will go out of business, the report states. It cites figures that show the labels make more money on every track sold than they do in the shops.
The Independent has acquired figures that show Apple gets just 4 cents from each 99-cent track sale on its US iTunes Music Store. Record labels snatch 62 cents - or more, and publishers purloin 8 cents per sale.
"Copyright owners have doubled their share of royalties, even though the marginal cost of manufacturing has fallen to almost zero," the report states.
Tom Dunmore, editor of Rip&Burn (a new title that launches September 30), told The Independent he believes many new and existing services will disappear within five years at current licensing prices.