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Yes, it is the reasonable basis for calculating the royalty paid. But in a comparison of what the artist makes versus what the label makes it is profits that is important.
There is a large quantitative difference (if not qualitative) between "writer's make $0.08 on each DVD while the studios make $19.00" and "writer's make $0.08 on each DVD while the studios make $4.75."
I don't know if $4.75 is the right number but I vaguely remember reading somewhere that about 75% of the DVD price goes to overhead. There's also the fact that a studio loses money on an unsold DVD but the writer doesn't.
Not that this makes the writers any more or less on the sight of good and honor. I'm just picky about seeing people use numbers that make sense for the argument being made.
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