Quiz: how much money has Stairway to Heaven made in royalty payments?

[Rain Man]

It's the honor system. Make your guess and then check out the number from this article about the Taurus lawsuit: http://money.cnn.com/2016/06/15/medi...ial/index.html

Spoiler!

Condé Nast Portfolio estimated in 2008 that "Stairway to Heaven" had earned more than $562 million in publishing royalties and record sales since it's 1971 release.

And recognize that that number is nine years old. The song was released in 1971, so $562 million only covers 37 years of its 45 year history.

[DaneMcCloud]

Originally Posted by Frosty

I wonder if some of the money they are claiming Stairway made comes from the Song Remains the Same film and soundtrack? The film been released a couple of times to theaters and also DVD and Blu-Ray. The soundtrack is probably in most Zep fans' collections, too.

I would imagine that was the case. I think they were using Stairway to Heaven as the driver of Led Zeppelin IV, which in turn generated the majority of revenue.

Would IV have sold 30 million copies without Stairway? IMO, no.

[Amnorix]

Originally Posted by DaneMcCloud

I know this all too well, unfortunately.

Yeah, I typed this and then laughed at myself because I'm reading about this crap and you're living it. Bit silly, but maybe others didn't know.

[Frosty]

Originally Posted by DaneMcCloud

I would imagine that was the case. I think they were using Stairway to Heaven as the driver of Led Zeppelin IV, which in turn generated the majority of revenue.

Would IV have sold 30 million copies without Stairway? IMO, no.

It looks like they just added up the sales of the four Led Zeppelin albums that Stairway appeared on:

In 1972, Zeppelin and its label, Atlantic Records, sparred over the band’s refusal to release “Stairway” as a single. But as a result, the public had to buy the album, known as Led Zeppelin IV, to get the song, snapping it up as if it were a single. All told, “Stairway” has appeared on four Zeppelin albums, sales of which have earned Atlantic and the band $500 million, including $56 million for last year’s downloadable album, Mother*ship. Sales of 2 million DVDs featuring live performances of “Stairway” have brought the band and the distributor, Warner Bros., $48 million. Last fall, Zeppelin, surprisingly, signed a deal *believed to be worth $2 million with Verizon Wireless that made ringtones, alert tones, and full-song downloads of "Stairway" available. The band, publisher, and label will share a 10 percent royalty on every download.

http://upstart.bizjournals.com/cultu...es.html?page=2

[Rain Man]

Originally Posted by Amnorix

For what it's worth, content PROVIDERS are crushing, absolutely crushing, content CREATORS in all spectrums of media.

Newspapers are dying, but Google, etc. are killing it.

Books and authors are limping, but Amazon rules the world.

TV networks are struggling, while cable and internet companies, and Netflix, conquer all.

The pipelines that get eyes on site are all that matters now. The people that create the stuff that people want to see (or hear) are getting raped.

That's a very interesting point. I wonder if one could conclude that by making it very easy to get content, the providers have diluted the value of content. It could also be the simple answer that they providers control access and so can leverage that to drive down content prices, but I don't really see that as the market dynamic.

[vailpass]

Originally Posted by DaneMcCloud

Okay, as to the original question posed, I can't fathom how they got to the $575 million dollar number, unless they included the actual album sale as a complete number. On a side note, Led Zeppelin opened their catalog up to the streaming services in mid 2013, so those figures, as low as they may be, weren't included in the reported number.

Led Zeppelin IV, at least according to the RIAA (which is unreliable, as they only counted shipping, not Point of Sale) sold 23 million copies in the United States and about another 7 million worldwide.

Stairway To Heaven was one of 8 songs to appear on the album. Prior to 1972, the Mechanical Statutory Rate was 2 cents, meaning that the songwriter(s) earned 2 cents for each album and single sold. All songwriter(s) of that era were subject to a Publishing or Co-Publishing deal. Led Zeppelin had a Co-Publishing deal which mean that 75% of the income from mechanical sales and air play (Performance) went to the songwriters and 25% of mechanical and performance went to the Publisher.

So, at 30 million copies, divided by eight songs, multiplied by 2 cents, multiplied by .75 equals $56,250.00 in publishing. The total of all 8 songs would be $450,000 dollars.

The price of albums varied in the 1970's but for this example, I'll use $4.99 as a median cost of an album. So, $4.99 times 30 million, which equals $147,700.00 dollars for the entire album and $18,712,500 dollars for Stairway To Heaven.

The average record deal back then paid the Artist 14% of the total sales of an album or single, which wasn't payable until the Artist recouped the advance money given for the production budget (Producer, engineers, studio cost, etc.). Back in the day, those costs were in the millions. Anyway, 14% of $147,700 dollars is $20,958,000, which would have been paid to the band.

So here's where were at:

Publishing: $450,000.00 dollars
Unit Sales: $147,700.00 dollars

At this point, we're only at $150 million dollars generated by the sale of Led Zeppelin IV, which is far shy of the $575 million that Stairway To Heaven allegedly earned on its own. $10 million was estimated for Synchronization (use in Film, TV and commercials) but even then, we're only at $160 million for the entire album.

Could the additional $400 million come from radio airplay? I'll need to open some old databases but it's very possible that Stairway to Heaven earned an average of $10,800,000 per year in Performance Royalties (Radio Play) over that 37 year period.

Thanks for doing all the leg work.
Wow, now I see why some artists try to start their own labels.

[Ming the Merciless]

Originally Posted by Psyko Tek

shit load of money for a song that sucks balls

[Amnorix]

Originally Posted by Rain Man

That's a very interesting point. I wonder if one could conclude that by making it very easy to get content, the providers have diluted the value of content. It could also be the simple answer that they providers control access and so can leverage that to drive down content prices, but I don't really see that as the market dynamic.

Dane might have more insight on this than I do (likely so), but it's my understanding that it's the final point you raised that is driving the issue.

Controlling eyeballs is what gets you market power now.

[lawrenceRaider]

Originally Posted by DaneMcCloud

I'm sorry, that's the correct number. Each streaming company has a different agreement but Spotify pays 1/10,000th of a cent. They claim that they pay an average of .0007 cents but that figure is extremely rare.

James Blunt claims that he's paid 0.0004499368 per stream. There are artists that have had millions of streams, only to be paid less than $20.00 dollars.

I had a statement in which I was paid $16.35 for 59,990 streams via Netflix. That's .0002 cents, which is higher than Spotify, proving that all streaming sources aren't paid evenly.

It's a mess.

What do artists get paid per listen on "real" radio? Say a song plays in LA and potentially 4 million people hear it, or even just 500,000 people? Hint, it's less per listen than streaming.

[lawrenceRaider]

Originally Posted by DaneMcCloud

Here's the real deal about Spotify: They don't pay artists equally. More importantly (and something that is mostly unknown) is that the Major Labels own 20% of Spotify.

Now, while Spotify may state that they paid out $300 million, that figure includes the Master License Fee, which could be anywhere from $100 dollars per song to $100,000 per song. Artists and songwriters don't see that money from streaming services. That goes directly to the record label, as they own the Master Recordings.

That's just another reason why people like Tom Petty have long lobbied for the reversion of the Master Recordings to the Artist after a period of 15 years.

Any good tunes I hear on a streaming service, I go buy the album, from the artists website if possible. I've bought a lot of music because of Pandora, and by extension because of Youtube.

[DaneMcCloud]

Originally Posted by lawrenceRaider

What do artists get paid per listen on "real" radio? Say a song plays in LA and potentially 4 million people hear it, or even just 500,000 people? Hint, it's less per listen than streaming.

But that's not how the payments for terrestrial radio are calculated by BMI, SESAC or ASCAP.

[DaneMcCloud]

I just opened some old databases and was pretty shocked at the low amount of Radio Airplay revenues.

We didn't have Led Zepplin but we had some pretty huge artists and songs, including the hit song from the Titantic soundtrack, and we only collected $8 million in an 5 year period from ASCAP for radio performance.

Local, Cable and Network TV accounted for $23 million during that same period.

I think that $10 million per year for Stairway To Heaven is extremely unlikely.

[Amnorix]

Can I ask a question -- why in the **** are royalties and such REGULATED BY FEDERAL LAW?

Why isn't that just determined by the market?

Or am I misunderstanding some of what I'm reading?

[DaneMcCloud]

Originally Posted by Amnorix

Can I ask a question -- why in the **** are royalties and such REGULATED BY FEDERAL LAW?

Why isn't that just determined by the market?

Or am I misunderstanding some of what I'm reading?

Royalties are regulated by Federal Law because artists and composers would have no one to speak for them (us).

The Statutory Rates are determined by Congress and if you ask anyone, whether it's a producer, musician or songwriter, they're WAY too low.

9.1 cents per song before the Publisher's take? That's insane and it used to be waaaaaaaaaaaaay lower.

In Europe, artists are paid performance income for radio play, yet they're not paid in the United States, only the songwriter(s). Film Performance Royalties are also paid in Europe but not in the United States.

It's a crazy business and without government regulation, none of us would earn any money.

[DaneMcCloud]

Also, because of that, there's no performance income on movie trailers. So every single time you sit through a trailer at the theater, the composer(s) doesn't receive a dime.

The only way trailer composers are paid is via a sync fee and because it's a such a competitive field, sync fees have plummeted in the last decade. What used to cost $100-500k can now cost $10k.

For that reason alone, I don't participate in that area of the business. I'm not going to waste hours and days creating music that could be licensed in a movie trailer for a small upfront sync fee and no performance royalties, when I can earn upfront fees a large performance royalties from TV.

[lawrenceRaider]

Originally Posted by DaneMcCloud

But that's not how the payments for terrestrial radio are calculated by BMI, SESAC or ASCAP.

Right, but what do they get paid per play, since we can't just compare the rate per listen via terrestrial radio since there are more listeners than per play on streaming services. It's a paltry amount per listen when you put the numbers to it. Kind of makes the whining about streaming seem a bit ignorant.