From the it-couldn’t-have-happened-to-a-nicer-group-of-people desk:

Susan Butler, Billboard’s legal columnist, has a copy of the European ruling on the merger of Sony and BMG. The EU approved the merger a few years ago, only to have a court annul it due to insufficient reasoning. So a new approval has been filed, with a lot of the gory details of how the industry, in Europe at least, is faring. She says:

This report is unlike any other because it follows the most in-depth government investigation of the record industry in the history of recorded music, and it reveals digital pricing information in the European Union long held secret.

While the report doesn’t share the actual money figures, it does give a window into the crazy complexity of the world the majors now have to find their way through. For example, the report examined the deals the majors cut with five digital sellers and five mobile sellers.

Before you read her description of the deals, put yourself in the position of being the head of an international record corporation, faced with precipitously declining sales of your traditional product, the CD.

Oh yeah: Plus, remember that in your entire history you’ve had firm control over the product; had to deal with basically only one way to sell it; and been able to raise prices at will, withhold royalties from artists with impunity, and pay off radio stations to get your product played on the public airwaves to boost sales. Now, consider this:

In 2004-07, the agreements became more diverse and more complex. The contract terms and wholesale pricing structures are often customized to reflect the market position of the digital retailer and how much the label values the services that the digital company provides.

Each of the majors’ deals vary with each of the digital business models that exist in the online and mobile markets. These models include subscription, streaming and advertising-supported services.

There are different pricing conditions, discount structures, user conditions, digital rights management restrictions and other contractual conditions. In each of the major’s contracts, the way the label shares revenue or marketing costs is also significantly different from one another.

… and—ringtones aside—none of it anywhere near as remunerative as a good old-fashioned $18.98 list price CD! Butler has another dozen grafs of similarly complex detail for other parts of the new spectrum of income streams.

What this means for artists isn’t good:

[…R]ecording artists may never truly have transparent royalty accounting. The labels’ wholesale prices charged for digital and mobile distribution must not be transparent if the companies want to avoid violating antitrust laws. The more complex they make their pricing models, the less able they are to ever fix prices and thwart competition.

This could create an immense challenge for artists who audit the labels, especially when the labels’ deals with digital and mobile services are made on a catalog basis rather than a per-artist basis.

What the industry is already seeing is that current artists with some leverage at the label might get a piece of that action; old and nonactive ones might not.

And one final note we should remember as we read reporting on how the industry is doing in the future:

No one outside a major label can estimate how much revenue that label receives from digital uses. The digital pricing structures and other contractual terms, which are all confidential, are too complex. As a result, any market-share analysis based on unit sales will likely be misleading relative to actual revenue earned from the digital marketplace.