Industry information that you can actually use October 2002 News
is allegedly objective. This is anything but. This is about And
they make some big ones of both. Let's take a look. But first: FIRST BLOOD MAY LEAVE BOTH LABELS AND ARTISTS IN THE HOLE For those who have not seen my piece on the record company accounting hearings that took place this past week in LA, it's worth a click on MusicDish (http://www.musicdish.com/mag/?id=6675) Hearing people like Back Street Boy, Kevin Richardson, saying he was not getting royalties even after three hit albums, gives me a thrilling sense of vindication. But can you get hip to this? I'm not sure I can support the artists on this one, even though I believe that they are right. I know it sounds odd but here's my take on it: There has never been a time in history when inviting Big Brother to write laws that regulate the way you do business has been beneficial to the little person. Even banking regulations, which were initiated during the New Deal did not serve the people well in the roaring 80s and 90s. Once Uncle Sam writes laws, this gives him permission to peek in once in a while to see how we're doing. I see a door to censorship being opened that we may not be able to shut. A censorship that may be covertly manipulated by government investigations of abuses on both sides of the issue. In addition, government rarely stops at only one Bill when it comes to regulation. One leads to another, which leads to another. You get the idea. Artists and labels need to get it together or everyone loses. Labels don't be stupid. Give the artists a little something to chew on here. Relax the auditing restrictions on duplication records and design royalty statements that make sense. It may cost you a bit of money here and there, but think of the alternative. It's nothing short of an industry melt down if you let the government in the front door. Even the senators at the hearing were saying that. Even they don't want to stick their nose in this one. It's music for Pete's sake. Were you listening? Hey, Hilary Rosen, Cary Sherman, (RIAA) listen to me: do you want your legacy to be as the creeps whose tactics made music the first government regulated art form? How embarrassing. Enough is enough. Talk to your clients. Video tapes of the hearings are available for $5. I strongly urge everyone to get one. Info is below. Send a check made out to SENATE RULES COMMITTEE: The turnaround time for dubs is usually five working days.
DAUGHTERS OF JAMES BROWN SLAP HIM UPSIDE THE HEAD AS THEY STEP BACK AND KISS THEMSELVES. HAA! Hip to the fact that only songwriters are guaranteed a paycheck in this business, way back in the seventies the Godfather of Soul made his two daughters (6 and 3 years of age then) co-writers of 25 songs, including the 1976 ``Get Up Offa That Thing." In 1998, his daughters had him committed to a psychiatric hospital for his addiction to painkillers. Upon his release, Brown vowed to never pay another dime to his daughters. So now they have slapped him with a $1 million lawsuit. Absent of all shame, the daughters' attorneys actually told the press that they "helped him write the songs." Brown has paid his ex-wife her share of the proceeds he promised her
around that same time and has said he would pay his off-spring almost
$200,000 if they gave up the copyrights and left him alone. See, the
old adage is true: you shouldn't do business with family. Especially
when your dad is the Godfather. FEDS ROB THE RIAA BLIND If you're a recording artist and you gleefully read this weeks story about the major labels having to pay a $138 Million fine for price fixing CDs, then the last laugh may be on you. If you're an artist or songwriter already bemoaning the fact that royalties are hard to come by in major label deals, then the Federal Trade Commission just made your worst nightmare come true. In what the main stream press is calling a "landmark decision," the Attorney Generals of 47 states and the FTC got together and are going to make the major record companies and several major retail record chains pay a mammoth fine for committing the high crime of trying to ensure that their businesses turn a profit. Labels have been struggling for years with little in the black. A major label earns about $4 on every CD they sell and this must be countered against all their overhead and the many CDs they give away. Starting in 1995 with the advent of the so called "super stores" places like Best Buy and others would happily sell CDs at or below cost just to bring in customers, only to sell them cheap electronics. "Bait and switch," as they used to call it, has always been questionable. But instead of punishing the budget stores', the Feds have decided to punish the labels for trying to keep the price of the CD up to its advertised retail price. Why? Well the labels are an easier target for a quick settlement says my inside sources. They've been badly beaten up in the press these past two years with the Napster issues and now the chickens have come home to roost. In 2000, the Big Five got together and decided, as a group (and this is the important part) that they would refrain from giving the budget-stores the cool in-store pop-up cardboard cut-outs and in-store signings that you normally see at Tower Records and the like. And why should they? Should a store selling a CD for $11 get the same level of service that as a store selling a CD for $15-$20? The Feds apparently think so and have fined the Big Five $138 Million for not giving places like Best Buy the privilege of having a life sized cut-out of Britteny Spears or Ozzie Osborne in the store lobby. (Something apparently many stores wanted.) Claiming that the withholding of in-store goodies was part of a scheme called MAPs (Minimum Advertised Pricing) the Feds said that this practice (widely accepted in the book publishing trade), was in violation of anti-trust laws and ordered labels to pay $62 million of the settlement in cold cash to the various governments of the 47 states where this took place. (It should be noted that the money goes not to consumers or artists, but the to the local governments whose citizens where "victimized" by being forced to buy music at discount prices without the benefit of getting to look at the big in-store cut-outs.) Now, call me madcap, call me the dickens, but does this seem right? On one hand the California Judiciary is saying that they might draft legislation to make labels pay more money to artists, and then on the other hand, the Federal Trade Commission is ensuring that artists get less money by saying that the labels also have no recourse when trying to keep the retail sales price of their product up. (Artists are paid off a percentage of the retail sale price, remember?) Does anyone else see anything weird about this? Well, the Feds claim that because collusion amongst the Big Five was at the heart of the MAP policy, that makes it a conspiracy and, therefore, anti-trust. The Big Five said they received no financial gain from the MAP policy, noting that the wholesale price charged to retailers was the same whether or not they participated in the policy and that it's the artist that will be most affected by this. And I half-believe them, for once. The Big Five do not think they did anything wrong but settled to defer higher costs in litigation. Regardless of the fact that labels have used this legal bullying strategy on their own artists to deter audits, it's basically still a high-brow form of extortion. And who will ultimately suffer? The industry as a whole; artists, writers, musicians, producers, EVERYONE. This will likely make other multi-national corporations, interested in investing in the US music business, take a harder look at the viability of it. Not good if you're someone like EMI or AOL trying to sell off your label. The Feds say that after $62 in cash is paid, about another $75.5 Million will be paid in free CDs to be distributed to schools and the handicapped. These will likely be deducted from artists' recoupment accounts as "special free goods" and result in far lower royalty checks for this holiday season. Here's the Butcher's Bill: Losers: Universal - $18 million in cash and $21 million in free CDs (These amounts were based on market share.) Winners: Best Buy - stock closed at $22 that day, up from $18 as this years all time low. 47 State Departments - $62 Million. For a long time I have wanted labels to see the error of their ways. But I never wanted this. Although labels anticipated a large settlement months ago and began slashing jobs to correct their budgets, I believe that we can expect far more lay-offs and fewer signings until they can recover from this slam dunk. This is what happens when you ask the government for help. It's like a box of chocolates. In a related story, the FTC has decided to open talks with Parker Brothers, the makers of the game Monopoly. They intend to suggest new rules to the classic game tailoring it to the new millennium. Now, instead of winning the game when you acquire all the properties, you will instead be required to pay Parker Brothers all your money until you are broke. Then you can take that little silver boot and kick yourself in the ass for trying to have a successful business in the first place. That's all. I'm tired now. Mo out "Business is an art of removing money from one man's pocket into
yours without the use of a gun." --Voltair
|
|
|
Industry News Lobby | Scam of the Month | March-2001| September-2001| November-2001| February-2002| March-2002| September-2002|October-2002| November-2002 |
|
|||||
