Digital music . . . a raw deal for the artists?

A Slashdot thread on the economics of digital music linked to this more detailed study of the situation:

King of comic rock, Weird Al Yankovic says digital is a raw deal for artists like himself. When asked by a fan whether purchasing a conventional CD or buying a digital file via iTunes would net Yankovic more pocket money the artist answered on his website.

"I am extremely grateful for your support, no matter which format you choose to legally obtain my music in, so you should do whatever makes the most sense for you personally. But since you ASKED... I actually do get significantly more money from CD sales, as opposed to downloads. This is the one thing about my renegotiated record contract that never made much sense to me. It costs the label NOTHING for somebody to download an album (no manufacturing costs, shipping, or really any overhead of any kind) and yet the artist (me) winds up making less from it. Go figure."

While it's an exaggeration to say that it costs nothing for a downloaded song, the costs for a download sale are significantly lower than for a physical media sale. The different return to the artist, however is real:

If your deal with your record company is like The Alman Brothers, then you're getting something like $315.50 for those same 1,000 songs (83.3 CDs worth). That works out to $0.31 cents per song, instead of the $0.045 on a digital download.

Ouch! It turns out you were being more than kind to that fan by telling him to buy either format he wanted, you're losing $0.265 cents per song! . If all of your fans bought through iTunes rather than buying CDs at the record store you'd be looking at an overall reduction in income of 85%!