The Featured Artists Coalition has been a long time coming but with its launch in Manchester today at In The City its moment has finally arrived. The fightback starts here.

That the record industry has fleeced consumers for many decades is well known. The extent to which they’ve exploited musicians is less widely understood. That’s because unknown recording artists complaining about their treatment by a large corporation doesn’t make news. Whereas if the artist concerned is famous enough to make the headlines – George Michael or Mick Hucknall for instance – they’re dismissed as a millionaire whinger.

But the facts are plain enough, as I set out in a piece for The Guardian’s Cif blog in March last year:

Albums have long been more expensive in Britain than almost anywhere in the world – and even in the internet age record companies are still fighting a rearguard action to keep them that way.

In 2004 the BPI (British Phonographic Industry) used copyright law to prevent CDwow.com from selling legitimate albums they’d bought and imported from Hong Kong – forcing the online retailer to hike their album prices by £2. In February 2007 they took the company to court once again for the crime of once again lowering their prices.

“Contrary to some reports,” said BPI lawyer Roz Groome, “this case is nothing to do with price.” No indeed – or with blatant protectionism. Her team singled out the trader’s offence of “selling the Live Aid DVD at half price”. A canny choice – to remind us of the record companies’ esentially charitable nature, and draw attention to the heartless CD-Wow stealing food from the mouths of African babies.

It just won’t do. Take iTunes – where a download costs you and me 79p compared with 50p for US residents. Tax is cited as one reason for the price difference – but the other is that after years of wrangling 79p was the lowest amount UK record companies would settle for.

And don’t imagine this was to protect the interests of British musicians and composers. Out of that 79p, the person who actually wrote the song gets just 6p to share with their publisher. Even the credit card company sees 7p per individual download, while Apple takes about 12p for administration costs.

The remaining 54p goes to the record company, who pay the recording artist somewhere between 6p and 12p. This may seem stingy, but it gets worse. All the recording costs (and most of the promotion) gets paid out of the artist’s tiny share of the earnings. Which means the remaining 42p is therfore pure gravy for the record company.

There are no pressing, storage or distribution costs with iTunes – even the accounting is done by Apple. Record execs will tell you these margins are needed to cover the risk of investing in new artists. But in fact the risk is much lower than you might think.

Say a label risks advancing you £100,000 to record and promote your new album. Say (for simplicity) it’s sold only on iTunes at £7.90, and that your royalty rate is a straight 10% of the retail price. Result: for each album sold, the label receives £5.40 – and knocks 79p off your hundred grand debt. Do the arithmetic.

At 20,000 sales the label has received £108,000 from iTunes. In other words they’ve made £8,000 profit and you still owe them £84,200.

At 50,000 the label has made £170,000 profit while you owe them £60,500.

At 100,000 the label’s has earned £440,000 and you still owe 21 grand.

It’s only at 130,000 sales that the artist finally recoups – and earns £2,700 in royalties. The record company has made almosy £600k.

The example is simplified and all sums quoted include VAT. Actual figures will vary, yet the picture is broadly accurate: very few bands and artists ever see a penny in actual royalties from their record company. Nearly all their earnings come from touring, merchandise, publishing – and performance royalties from PRS and MCPS when their music is played on the radio.

You might imagine that if artists pay the entire cost of their recordings they’d at least own them afterwards. Not a bit of it. Recordings made during the contract period almost always belong to the record company in perpetuity. Or at least for the life of copyright.

The definitive and most famous article on this subject was written by record producer Steve Albini in 1993: The Problem With Music. Internet notwithstanding, depressingly little has changed in the general attitude of record companies towards the people who actually make the music they sell.

Yet the following (paraphrased) comment by Gab sums up a general lack of sympathy for musicians who complain:

“The complaints about how (artists) get ripped off – and the pressures of fame – really get to me. I haven’t met a single artist who was forced to sign a contract with a record company, most artists were very eager to sign and yes, a lot made the mistake of not reading the small print. It happens every day to people who aren’t famous and you don’t see a big fuss about it. They signed the contract of their own free will and if they don’t like it they probably shouldn’t have signed in the first place.”

Up till now anyone who’s serious about getting their music heard simply hasn’t had a choice. New moves by the record industry to shore up their diminishing revenues now threaten to reduce the income of writers and artists still further. It’s high time powerful stars and penniless newcomers joined forces to protect their common interests. And maybe The Featured Artists Coalition will be able to bring that about. The fightback starts here: