I wonder if this is the result of blinders-on bureaucrats or greedy executives. The bands are alleging that the record label is deducting standard physical packaging costs from their royalties on songs sold through iTunes but of course the label isn’t incurring those costs. Not much per individual song but over the course of a year those pennies certainly add up and these corporations have a bad enough business relationship with artists and the public on pricing already.
Having worked in the purchasing department of a major book publisher some years ago, I’m sure acts aren’t charged actual costs but some kind of average–tracking which lot of jewel cases or CD blanks were used for a specific CD just isn’t practical. So you can imagine that the accounting systems use a rule that assigns cost as a percent of revenue or fixed amount per unit and the bookkeepers didn’t think to update the software for this different type of sale.
Then again, recent years have given us more than enough examples of executives finagling things to their advantage, legal or not.
BillSaysThis 