According to recent press accounts, certain record companies are starting to insist on ownership and control of artists' Web sites and to demand a significant percentage of merchandising income generated from those sites. This has already occurred in a few contract negotiations and will most certainly arise in future negotiations.
While that may not be a problem for someone like Alanis Morissette, it might well be for artists with less leverage. Basically, that is, for everyone else.
The past year has brought significant changes to our industry. We're only really beginning to explore the possibilities of the Internet and how it will transform our business and our daily lives. Whether it turns out to be one of the most spectacular innovations since the Industrial Revolution or just another labor-saving device that will give us more leisure time and then attempt to fill it, one thing is clear: It is a uniquely democratic forum for the dissemination of ideas, in which any person can be heard by countless numbers of other people.
This environment should be restricted only by what people themselves choose to distribute or withhold, and not by gatekeepers intent on influencing the content or the means of distribution, whether for ideological or commercial purposes.
Since the major record companies have been owned by public corporations, there has been an increasing emphasis on quarterly earnings. This perspective is anathema to the successful operation of any creative business, as artists don't create on a regularly scheduled basis. To insist upon such inevitably leads to a lowering of artistic standards and may be one reason why "manufactured pop" is at the top of the charts today.
This emphasis on quarterly earnings wasn't as pronounced from the mid-80's through the mid-90's, when people replaced their vinyl albums with CDs and record companies enjoyed unprecedented profitability. Since this has slowed in the last few years, the labels have been scrambling to maintain the inordinately high level of earnings attained in those boom years.
Some executives believe the Internet may potentially be the answer to their problem, but it's a fast-moving and unpredictable environment that presents new obstacles as soon as existing ones are solved. The response by some is to attempt to corral everything in this new medium. Therefore, the answer for artists is to keep moving forward so that the labels' lassos only occasionally snare their desired targets.
Artists and their representatives should always be aware to protect intellectual rights- especially when new frontiers are being reached on a fairly regular basis and nobody knows for sure where it will all lead.
Web sites have become an integral part of how artists keep in touch with the people who matter most to record companies, the fans, aka consumers. Fans will certainly be more inclined to buy a record if they are able to go to a Web site, learn about an artist, read lyrics, listen to some songs, and even correspond with the artist. This also makes it easier for record companies to sell back catalog and opens up a whole new spectrum of promotional possibilities.
Despite increasing advances, royalty rates, and even joint ventures for certain superstars, the overlooked fact is that the majority of artists are struggling to make ends meet. They don't have the leverage or resources to protect themselves against every new technology, (and the invariable royalty reduction) that the record companies invent. Most new artists who finally land a record deal after years of trying are so grateful that they willingly give up their current rights-as well as rights to a future that is unknown and being redefined every day. Not only is this myopic, but it will eventually become creatively and financially restrictive.
The Music Managers Forum (MMF) strongly urges artists and their representatives to retain all rights to their creative output in all forms that aren't currently under contract. The new-media companies know that E-commerce is nothing without product. They are more willing to form partnerships with artists, or at least give them a commensurate portion of the income generated from their ideas. It might even make sense for artists to strike deals with new-media companies for little or no advance money before negotiating a record deal, as long as there is substantial upside potential, and their intellectual property is securely protected. This precludes the question of whether such rights are included as part of the record deal.
The Internet isn't a new technology invented by record companies. It was created by scientists for the express purpose of disseminating ideas to others. This may be the one time the MMF is advocating the status quo.
Perry Resnick, treasurer of the Music Managers Forum-US, is a business manager and royalty auditor with the Rascoff/Zysblat Organization