Musicians take on record companies

Some have more anger to vent than a 'hood full of gangsta rappers. Others are singing the blues with more despair than B.B. King.

For decades, American musicians have lamented their treatment at the hands of record companies. In an industry where marketing and promotion are everything, many artists say they too often find themselves forced to sign away their careers at an early age - or risk never being heard.

But now, a growing list of songwriters and performers are challenging this long-entrenched system, taking on top record corporations from Sony to Universal to EMI.

Like film star Olivia de Havilland, who derailed Hollywood's studio hiring system in the 1940s, several top names are demanding more freedom in standard contracts, better copyright protection for their works, and creative independence known as "free agency."

If such efforts succeed, they could fundamentally alter the economics of the music business, shifting the balance of power away from those who package and distribute music in favor of those who create it. The result could mean everything from a wider range of music available in stores to lower CD prices.

"These activities have the joint potential to change the way the music business conducts itself," says Drew Borst, associate analyst for Sanford C. Bernstein & Co., a New York-based firm that follows the entertainment industry. "This may be just the changing tide that the creative side has long awaited."

Aiding the musicians' cause is the fact that the recording industry is already being forced to reexamine the way it conducts business to adjust to the demands of the Internet age.

In the wake of industry lawsuits against song-swapping website Napster, a host of other unresolved issues has cropped up - from royalty rates for transmitted music to who owns live performance rights.

"The Internet issues have blown the top off the industry, and everyone is looking in," says Noah Stone, executive director of Artists Against Piracy, one of several groups challenging the practices of the "Big Five" record companies, which together generate about 75 percent of record sales. "There's never been such a fantastic opportunity for artists to get out in front of change and carve a bigger piece of the pie than they have ever had."

Joining forces

The effort includes some of the biggest names in the business: Don Henley, Joni Mitchell, Peggy Lee, Tom Waits, Tom Petty, Jon Bon Jovi, and more, representing every type of popular music, from rock to jazz to country.

Several are uniting with Mr. Henley, a former member of The Eagles, under the banner Recording Artists Coalition. Last week, Henley testified before the Senate Judiciary Committee, calling for performance royalties for musicians whose works are sent or heard digitally over the Internet.

"Over the next several years, the Congress, the Copyright Office, the record companies, and the Internet companies will lay the groundwork for intellectual property rules and royalty rates for the exploitation of music on the Internet," Henley said.

"Most, if not all, of the discussions have been between the labels and the Internet companies. Yet the artists are the ones who create the content for distribution. Artists are simply asking for a seat at the table."

Joining Henley's group is Mr. Stone's group, Artists Against Piracy, which represents some 90 acts, including Bon Jovi, the Dixie Chicks, and Herbie Hancock. The Los Angeles-based organization was formed to fight for digital copyright protections and is now extending its reach to address other issues.

"The beauty of what is happening now is that musicians on all sides of several different issues are combining their forces," says Stone.

Courtney Love's lawsuit

Much of the activity against the recording industry is coming in the form of individual lawsuits, or other efforts by artists to renegotiate or break contracts they feel are unfair.

The highest-profile case is that of Courtney Love, lead singer for the band Hole, and former wife of legendary singer Kurt Cobain of Nirvana, who died several years ago.

Seeking to break her contract with Vivendi Universal, the world's largest record conglomerate, Ms. Love says she was coerced into signing away many of her rights, including ownership of her music, under a standard contract used by virtually all labels.

She contends that she chose the label she originally signed with - Geffen Records - because it was a boutique-size operation known for developing artists. But a series of mergers passed the company to MCA, then to Japan-based Matsushita Electrical Co., then to Seagrams, and then to Dutch giant Polygram, which owns Vivendi Universal.

If she prevails in breaking her contract, dozens of performers and bands could try to follow suit, say experts. Already, singer Alanis Morissette is reportedly stalling delivery of her next album to Maverick Records (a division of AOL-Time Warner's Warner Music Group). Sources say she may follow Love's lead in seeking court action.

At the core of the Love lawsuit - and one of the major complaints of musicians - are rules that allow recording artists to be bound by long-term contracts that are not allowed in other industries.

The issue concerns a provision of California labor law written 50 years ago following the battle by de Havilland - and which is standard practice nationwide. Under the law, entertainers cannot be tied to any company for more than seven years. But state legislators amended the law in 1987 to give artists more time to meet their contractual obligations.

"Basically, artists were getting huge advances to produce three to four albums, then sitting on their hands after producing only one or two," and waiting for their contracts to run out, says one industry analyst who asked not to be named. "So the time limit was extended beyond seven years to give creative leeway."

Love is also seeking to expose other accounting practices that she feels cheat artists of legitimate profits.

Biting the hand that feeds them?

While the top corporations are not commenting on the suits, they have argued privately that record companies invest millions in developing and marketing artists and that long-term contracts are the only means of recouping such expenses.

"It's understandable that artists who have been successful in the industry sometimes begin to resent the system once they've reached a certain threshold," says Hilary Rosen, CEO of the Recording Industry Association of America, which represents the record companies.

Ms. Rosen says those who are successful must support the other 90 percent of music acts that are signed, developed, and marketed but that never become profitable.

"This is the same system that supported many of these artists when they were nobodies," she says. "The fact is, someone took a chance on them as well."

(c) Copyright 2001. The Christian Science Monitor