Seems the copyright laws don't explicitly state that artists are entitled to royalties from interactive broadcasts -- and that includes the downloading of digital music. That made for an interesting discussion on Apr. 3, when the Recording Artists Coalition (RAC) -- the largest group representing musical artists in the debate -- presented testimony before the Senate Judiciary Committee in Washington, D.C.
The topic: the future of digital music. "We are very concerned about fair compensation. How much will artists get paid for Internet music? Who will collect the royalties? What kind of licensing system will be in place?" asked Don Henley, longtime lead singer and songwriter for the Eagles, testifying on behalf of RAC.
DIFFERENT NOTIONS. Until now, few artists have spoken out about how record labels are tapping the Internet's potential. But as the hearing unfolded, it became clear that record labels and artists -- both of whom see dollar signs on the Net -- have vastly different notions of how licensing deals between music Web services like Napster and record labels should be carved out.
Musical artists represented by RAC want to be able to sell their music on the Internet without going through the bureaucracy of record labels. While many artists supported the copyright-infringement lawsuit the RIAA brought against Napster, they now want labels to aggressively award licensing deals to legitimate independent music Web sites in addition to the labels' own online services. That's something that isn't happening as fast as artists hoped.
On Apr. 2, EMI, Bertelsmann, and AOL-Time Warner announced they were teaming up to create MusicNet, an online subscription service where users can download music for a fee. But as of yet, few licensing agreements have been crafted between major record labels and independent Web sites. That has raised some eyebrows. "We need to make sure that people other than the major record labels are allowed to participate in this," says Senator Patrick Leahy (D-Vt.).
CHILLING PROSPECT. Certainly, copyright security problems have slowed the record labels' licensing efforts. But artists say they won't accept that excuse for long. RAC says if labels don't voluntarily license their music to independent Web sites, Congress should consider compulsory licenses.
That prospect sends chills up the spines of record label execs. Not only would compulsory licensing force labels to offer their entire catalog of music to competitors but the government could also have control over where licensing fees are set.
So why are artists suddenly so adamant about sticking up for independent music sites? The answer probably lies in the history of tension between labels and artists. Record companies often give performers a pricey advance on all recording and marketing costs that is then recouped from the artist's royalties. As a result, a typical musician could sell half a million records and not see a single extra dollar, Henley says.
A wide variety of independent music sites would mean artists could aggregate an audience without having to go exclusively through a major label's online service. And that could help them generate additional revenue through other means, such as touring and merchandise. "What I've come to realize is that for the majority of artists, this so-called piracy may have actually been working in their favor," testified alternative rock star Alanis Morissette. RAC also says artists who want to put their music on free sites like Napster should have that right -- something they don't now have.
UTAH SONGBIRD. The recording industry says it's inviting artists to the table. "Artists are starting to participate in discussions," Hillary Rosen, the president of the RIAA, told the Senate. "At the end of the day, it starts with the creative genius of the artist. The rest of us just build on that," added Richard D. Parsons, co-chief operating officer of AOL-Time Warner.
The problem for most artists below superstar level is that they aren't as organized as the record labels, and don't have much political muscle. Certainly not the big-gun lobbyists of the RIAA, which recently enlisted Bob Dole to work on its intellectual-property team. And performers don't carry the clout generated by the $3 million in campaign contributions the record labels spent in the 2000 election.
But what artists do have could prove more powerful more money: an influential ally in Senator Orin Hatch (R-Utah), the chairman of the Senate Judiciary Committee who doubles as a singer/songwriter. Hatch says he's determined to make sure that artists are treated fairly as the digital music world develops. Whether that means amending copyright law, forcing compulsory licenses on the record labels, or simply holding glitzy hearings, may depend on how fast the major labels start talking compromise. By Nicole St. Pierre in Washington