Goodnight Kiss logoGoodnight Kiss Music (BMI) & Scene Stealer Music (ASCAP)

April 25 - May 19, 2001
The Record Company That Ate The World

Because, as a Songwriter and Publisher, I write numerous articles on what I believe are unfair and offensive music agreements, I am sent much mail now, with samples of heinous, online contracts from giant, corporate sites. Here is one of the latest I was sent, including the following clause:

"1. ..and no confidential or fiduciary relationship exists or is being created by this Agreement or your submission of the Material."

2. You hereby grant to (ONLINE SITE) the non-exclusive right, for 18 months from date of submission, to archive and broadcast the Material on the Internet. (ONLINE SITE) may also use the Material on other media such as CDs for promotional/non-commercial purposes at its discretion to promote the Website. You understand and agree that you will not receive compensation for this non-exclusive grant of rights..."

18 months of unlimited use to promote the site, with no obligation on the "label/site's" part to help the act financially or any other way? Since the point of a label is to sell product, and without making product available for profit, for 18 months, what would be the point of an artist making this deal? Traditional labels profit from careers (or at least "hits") they help support, online sites don't go there to any level. Shouldn't contracts be about what one GETS when one gives up something? With most online contracts, one seems to receive nothing, yet gives up everything. I look at the HUGE, household-names that are "behind" some of these sites and wonder just how many of them would sign something like this.

Am I missing something here? I'm a little bit confused as to why three or four (ok, maybe a few more) online music "entities" haven't taken over the world. In truth, I believe it's on the way -- someone's going to break through in about two minutes, and set the trend so quickly, it will redefine mach.

Prediction: Somewhere there is a nicely-funded, corporate-level, music label/distributor online, who has:

1. Stopped spending their money on litigators and lobbyists and hired copyright experts to work with their tech encoding experts, instead.

2. They have created (or adopted already-created) rates with the established agencies and associations, such as HFA, ASCAP, NMPA, etc. Just as a sidenote, many rates, currently, are NOT all that expensive -- if one is not trying to create millions of dollars profit in a matter of weeks, that is.

To re-cut a song on a physical medium is only 7.55 cents (currently) per unit, which can often be negotiated at an even better rate, and that's pretty much the case across the board. Industry proposed, online streaming rates are fractions of cents per listener per hour and/or per song. The last RIAA proposed rate I read about was $0.004 per song, per listener -- that's point-zero-zero-four, in case you missed it, and very well may end up being less than that. Actually, it is proposed, webcasters may pay either $0.004 (four-tenths of one cent) per performance per listener, or 15% of the service's gross revenues created by such transmissions.

At this writing, the negotiations continue. These are the costs of doing business with other people's works. They are exceptionally lower than most consumers (and often, artists,) realize, and hard to imagine being lower, and the first one to adapt for it, will be first to winner's circle.

3. This label has probably created tables of gain for artists' interest in their own product on a numbers-sold/time basis, where the more successful the product was, over a certain amount of time, the artist becomes more rewarded for the project, or a buyout amount and/or time is set at the start of the project... at minimum they are aware of the new artists' alliance movement, and have built in artist royalties and profit scales. Since Indy online artists have learned how to promote themselves via the Internet, their numbers can start being more competitive, based on their own promotional work, as well as whatever promotion the label supports them with.

4. This label has stopped fighting everyone, met with their accountants, and created a system each could live with in which all IP owners are compensated a realistic, but reliable royalty.

5. They have provided incentives to their physical record store merchandisers, based on moving physical product. It will be a relatively long time before the vast majority of music lovers will be able to keep up with (and consistently afford) the latest device, as they simply change too often.

They probably consider campaigns for one-of-a-kind merchandising, to create "packages" that cannot be duplicated, where the CD is only a part of the package -- so even if the CD is copied, the autograph, or picture, or guitar pick, or any number of things may not be -- a sort retail world incentive.

6. This company has realized that, with today's software, the accounting of uses and fair payments for copyright holders is a breeze, and gain is based on actual tracked uses, not inflated numbers. At one time in the industry, thing were not so traceable -- now they certainly are.

7. This new label will probably only express expertise in a few areas of music, and other labels with similar ethical policies will emerge in various genres, just as in the physical record world.

8. This online label supports those artists they believe in, just as an offline label does, which, of course, creates a demand for online special-product Indy labels, again, just as in the physical record world. It also leaves the door open to the Indy artist, who, if they CAN come forward with competitive product, will find homes on these labels.

Perhaps this label will have several divisions -- "subscriber" type members, who may upload any materials they, themselves, chose; a "pro" division, somewhat label supported for the working pro who gigs, has a following, and sells a decent amount of Indy product; and their "star" class, where established (usually because of a traditional label's promo and distribution, by the way) already-known musicians sell/supply their music.

By the way, I do not believe that an artist should be made to sign ANY rights away in order to pitch a label, online or off, nor do I believe that a label has an obligation to sign every artist that applies to them for a deal. If an online label/site wants a disclaimer on submissions, fine. Make a simple disclaimer -- don't try to take 18 months of rights for free, with the paltry excuse that the phrase "non-exclusive" is used. If a label finds something it believes in, then an agreement may be signed.

Once this magnificent label has been around a few years (perhaps months, Internet time considered), establishing policies of that nature, it will become another standard that defines a bottom line for creative works.

So this is what I predict -- the first online music entity that comes forward, who graciously and reliably meets the set royalty and practice rates, that establishes honest intent to a moral approach of good old American philosophy of reward for those who actually EARN it, will be the first winner of the next race.

Artists and intellectual property creators are tired of having to watch their backs -- they are tired of hype and overwork and a joyless industry of critics. A company that is willing to do the "right" thing AND the "tech" thing, will be the "next" thing.

Just my opinion based on my own experiences, not to be taken as legal advice.
Janet Fisher

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(C) 2001, 2002, 2003, 2004 Janet Fisher, Goodnight Kiss Music, no reprints without permission, all rights reserved world wide.