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In the Sept. 15 issue, ” Behind RIAA’s Subpoena Splurge” incorrectly stated that music company BMG planned to stop deducting recoupable “ marketing” expenses from recording artist royalties and that it planned to increase the royalty rates to artists for digital downloads. Rather, BMG overhauled its royalty accounting process by eliminating certain standard deductions (e.g., packaging, standard free goods, and new technology), which traditionally had been used in calculating artist royalties. Additionally, instead of basing royalties on the record’s suggested retail list price, less the standard deductions, BMG now bases them on a record’s wholesale price, without making those deductions. The policy also applies to online revenues, which are no longer subject to such deductions and are calculated based on the artist’s album rate rather than the lower singles royalty rate. According to Jim Cooperman, acting co-general counsel of BMG, the changes were implemented to create a more transparent and simplified accounting process. The correction has been made to the Web versions of the article.

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