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."

It confuses me too Weird Al. I think you deserve at least an equal amount of compensation for each digital track sold as you would be entitled to for that same one track on CD. 

As you said Al, "Go figure". I'm a big fan, you've given me a lot of fun music over the years, and I wanted to do what you said. So, I went and did the math.

Here's what I found out: (more after the jump)

According to DownhillBattle, Apple pays the labels $0.65 (some say its as high as $0.80) of the $0.99 cents paid for your song.

So, for an album with the average 12 songs, like your current release "Poodle Hat" which has exactly 12,  Apple takes in $11.88. Apple sends the label $7.80. That's $4.08 cents for the boys in Cupertino. And, it might be a pretty reasonable split if you then received the whole $7.80. Apple would take 35% of your work, for developing the infrastructure that makes you able to sell it to millions of people while you sleep, instead of selling it to 5 people out of your van in the parking lot of Stuckey's. That's what we call a value equation. Apple did work, and got paid for it. You did an arguably larger portion of the work, by creating something people wanted to buy in the first place, so Apple got a little money, and you got a good deal more.

Unfortunately, that's not how this version of the universe operates. So Apple sends the check to your record label.

The record label takes that $7.80. And, let's face it, they had something to do with your making the album. In some cases, you may have even been contractually required to make another album, whether you felt like it or not. So, you could say that without the record company, you'd not have made an album at all. They paid for the production, and some marketing, and now they should get paid right along side of you as the artist. You created the music, they recorded it and packaged it, marketed and distributed it. Right?

Well, not exactly. First, many artists can record fantastic music of very high quality in their own home studios. So, for some artists the record label is more marketing firm than recording technician(or, the guy who pays for one). But if the record label paid for your recording they will take 100% of sales until the recording costs are re-imbursed. They'll also keep taking money until paid back for promotional costs, packaging design and more.

If you manage to break even, here's where the money just starts rolling in. Right? The label got their money back (by taking $7.80 of every $7.80 that Apple paid them) so, now they're going to start sending you most of the $7.80 per record they are receiving.

Not so fast. According to widely circulated data from the coverage of The Alman Brothers suit against Sony BMG, you could expect something like $45 of each thousand songs sold to be paid to you in royalties. That's around 4% of the amount paid to Apple for your work, and around 5.7% of what was paid to the label. For The Almans', that works out to $24,000 when taking Nielsen SoundScan data of 538,000 Almans' songs sold as downloads since mid-2002. I don't have SoundScan data on your sales, but I'm sure you do. So the labels and Apple got 96% and you got %4. And as you said, there were no packaging, shipping or storage costs for your album sold though iTunes.

I went to Amazon.com and found that your album is selling for $14.98. That's $3.10 more than iTunes, but you get an actual CD, liner notes and a snazzy jewel case. And, you actually own the CD. You're really just kinda leasing the songs with iTunes, but we'll save that for another time. Suffice it to say that I think $14.98 is a totally reasonable price.

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%!

Eighty Five Percent! If they cut my income by 85%, I'd be making soup from old shoes down by the railroad tracks!

My advice is probably similar to what your accountant's would be. Tell your fans to buy a CD, your retirement income may depend on it.