Friday, September 2, 2011

How The ’70s Majorly Screwed The Major Labels

By Jeff Price

Lava lamps, Happy Days, mood rings, MASH, and Jimmy Carter’s Playboy interview weren’t the only things to come out of the ’70s. In addition, copyright law was revised by the U.S. government granting artists and songwriters “termination rights.” This law states that 35 years after 1978 the recordings and songs “owned” by record labels or publishers would revert back to the artist or songwriter regardless of if the artist or songwriter was recouped, un-recouped, etc. In other words, the government said to the labels and publishers,“ 35 years is long enough. Times up, give them back control over their work.”

For those of you counting, 35 years from 1978 is 2013.

This means albums and songs from Cheap Trick, The Kinks, AC/DC, Kraftwerk, Carole King, Peter Gabriel, The Cars, The Buzzcocks, KC & the Sunshine Band, Kenny Rogers, David Bowie, Black Sabbath, Tom Waits, Yes, Sex Pistols, Boston, Ramones, Bryan Ferry, Heart, Uriah Heap, Neil Young, Aerosmith, Brian Eno, Hawkwind, Whitesnake, Queen, Kate Bush, and countless others are eligible to revert back to the artists. Which means that the record labels, in addition to losing control over distribution (think TuneCore) may now lose the rights to the only thing left keeping them alive, the recordings that they make money off of.

And each year that goes by, means another set of albums and songs becoming eligible to revert back to the artist.

As you can imagine, the labels are fighting it. According to the August 15th, 2011 New York Times article, “Record Industry Braces for Artists’ Battles Over Song Rights,” Steven Marks, general counsel for the Recording Industry Association of America stated,

“We believe the termination right doesn’t apply to most sound recordings.” The RIAA’s position is that the artist never owned the recordings or songs in the first place so how could they revert back to them. They were just employees hired by the label to record their own songs. Therefore, the labels own the recordings forever (or until they enter public domain).

The issue here is over the legal definition of the term “Work For Hire”. If the artists were legally “work for hire” employees, the labels would be right. The RIAA and the labels saw this issue coming. In 1999, to assure their position and not lose rights, they were sneaky little scumbags and literally attempted to quietly slip a midnight amendment into a bill going through Congress called “The Satellite Home Viewer Improvement Act”. The bill was about “retransmissions of broadcast signals” (I kid you not). The RIAA had four words added to this bill that would take away the right for artists to own their recordings if they signed a major label deal. These four words would, by default, legally define the artists as “work for hires” and therefore the rights to the recordings could not revert back to them.

To quote the very comprehensive and well written August of 2000, Austin Chronicle article “Work For Hire,” (which you should read!)…

In 1999, “Turns out the amendment was added by a staffer named Mitch Glazer from the office of Subcommittee Chairperson Howard Coble, R.-N.C., Glazer now works for the RIAA, the organization that sought to have those four words included in the first place, and did so with alarming quiet.”

Fortunately, they were caught. The words were noticed and artists, and their lawyers, went to war. The result was that these four little words are no longer part of the bill. Which means that the courts have yet to rule if the labels are right or if the artists are right in regards to the reversion of rights.

So, we approach 2013, and both labels, artists, and entrepreneurs are frantically attempting to either hold on to, get back, or acquire rights. Clearly, the labels are not going to go quiet into that dark night, however, this is yet another crack in the firmament of the traditional label system, and ultimately a win for the artists. Of course, the artists, now more than ever, will need to be able to market and distribute their newly-acquired/re-acquired rights, so that they can enjoy sustainable artistic careers on their own terms. The labels will argue that the artists can’t do this; only the labels could possibly market and distribute their records. That argument gets a little more tenuous with each passing day.

Stay tuned for the mother of legal battles. It’s going to get very interesting as manager and former label head and owner Irving Azoff sides with the interest of his client, The Eagles, and takes on the very industry he helped create.