How big a cut are the Recording Artists getting out of those 99 cent downloads? Are the Record Companies licensing the downloads legally entitled to do so?

Looking at the second question first, the answer is probably Yes in many cases, No in others. Artists successful enough to afford lawyers capable of taking on EMI, Sony or Time Warner AOL have a chance of opening discussions on the subject, anyway. Others may wonder at the interpretation of key phrases in their contracts. One of Robert Fripp's business partners writes:

My own feeble allotment of energy has been focussed on supporting the Tall Pointy One fighting the good fight with EMI, who have put paid Crimson downloads on various sites without the approval of the band. The EMI contract does specify that they have the right to all new "record formats". But is a download a new format? ... After all, the King Crimson contract specifies that the DGM logo must appear on all records. If a download is a "record" (as it must be if EMI have the rights), then perhaps they will explain how they are going to put the DGM logo on it. Likewise, they do not have the right to alter artwork, and I would argue they have done so in the case of a download, which has no artwork.

I would be interested if someone can tell me if King Crimson form part of the iTunes service, allowing you to download individual tracks, as opposed to whole albums.

It is not that I am against downloads. They are certainly part of the future. But I hate hate hate labels who feel that they can twist a contract designed for a physical world to sell product in the e world, at hideously low royalty rates. Boo hiss spit spit.

But what hope is there for fair treatment when the EMI legal department cannot even remember the name of the guitarist in the band that has sold them over 3 million records in the last ten years. Oh yes. "Richard", that's the one.

Returning to the first question, and assuming the Record Company will see no need to renegotiate any contracts in favor of the artist until required to do so, a royalty rate of 10 percent on seventy per cent of 90% of 10/14ths of that 99 cents comes out to about four and a half cents. Oh wait, iTunes keeps one-third of the gross. Make that 3 cents.

But why would royalty rates applying to CD's suffice for downloads? Robert Fripp's instructive answers to a hypothetical interviewer might suggest that if standards developed for 78's can be applied to CD's, there's no real downside (for the Record Company) to applying the same guidelines to Downloads. Think of all the overhead involved in implementing New Technology!