WALLACE E.J. COLLINS III, ESQ.
A CALL TO ACTION: HOW TO SAVE THE RECORD BUSINESS 101
The idea taking hold in
some circles as a new model for the record industry is that music will
eventually be given away for free and artists will earn a living from
touring and selling merchandise. Not only is this a frightening frame
of mind, it is also defeatist. The record business most certainly
missed its cue when emerging digital formats started undermining the
business model and the means of distribution slipped beyond our grasp.
However, now that we know where we stand and have looked into the dark
abyss that could be our future, we need to take action. We, as an
industry, need to make more forceful attempts at changing the current
economic policies concerning illegal downloading, and changing and
strengthening the laws against such theft. All the touring in the world
is not going to make up for the loss of income from the intellectual
property: the copyrights in the sound recordings and in the underlying
songs embodied in those records. Artists and the songwriters need to be
rewarded for their creative efforts as is contemplated by the U.S.
Copyright Law, and the policymakers need to be made aware of the dire
situation we face if changes are not made soon.
Just recently I attended
the New Music Seminar where the idea of a new business model for the
record business was being touted. Rather than seeking record deals with
major labels where an artist assigns away his intellectual property in
exchange for a royalty payment on sales (and possibly a commission on
all income streams under the current "360" model), artists would become
partners in the ownership of their entertainment assets with
business-savvy investors. Together these partners would work to develop
the artist's career and reap the rewards from touring, merchandise,
records and songwriting/publishing revenues. On the one hand, the idea
of giving the artist an equity stake in its career is a promising
concept that is long overdue, and major labels should consider this
model. The investor takes a risk in working with the artist but if
there is success then both share in the upside. Of course, the artist
still needs a hit song and a hit record to launch its career. One or
two hits can yield sufficient fame to sustain an artist on the road
earning touring and merchandise income and maybe even garner product
endorsement income as well. However, at the end of the day, it still
comes down to the singer and the song.
If we had known then what
we know now, we probably never would have agreed to the Digital Music
Copyright Act (DMCA) safe harbor rules and the takedown provisions that
protect internet service providers (ISPs) and other gatekeepers from
having to assist our industry in combating theft. Allowing the
gatekeepers not to have to join in the fight against copyright
infringement now appears ludicrous. If anyone stands in a position and
has the means to work with the record industry to identify and control
theft, it is the ISPs. For all the information they capture about the
buying and viewing habits of individuals, they stand in the best
position to pinpoint the copyright thieves, and the laws should be
amended to correct this existing injustice.
In addition to the
successful lawsuit by the industry against Limewire, several lawsuits
currently pending before the Federal Courts in this country could open
the door to revisiting the discussion with politicians in Washington,
DC. There is the ongoing litigation where Viacom is battling Google
over alleged copyright infringing material on YouTube. How this case
develops will reveal much about where we stand under the law. There is
also the case of UMG suing Veoh which is currently pending in the Ninth
Circuit Court of Appeals. UMG is arguing that online content companies
like Veoh are no different than those offline. UMG maintains that Veoh
holds editorial control over the music videos that appear on its
website and therefore has a responsibility to proactively monitor
content for copyright infringement. Veoh argues that it is protected
under the safe harbor provisions of the DMCA and that the onus is on
copyright holders like UMG to identify infringing material and then
notify Veoh to take them down.
Of course, it would help
the artists and the record companies if a digital performance right for
sound recordings becomes law, but there are other legal avenues that
need to be pursued. Various remedies are available to cease the erosion
of the intellectual property which is the core asset of our business.
We need to lobby for changes in the laws and then implement variations
of DRM, rights technologies, ISP subscriber levies and other means to
preserve revenue from our copyrights. The idea that we might upset our
customers by enforcing our rights to be paid for our copyrights begs
the question of whether a store owner should resist prosecuting
shoplifters for their theft for fear of upsetting his customers. Those
are not the kind of customers any business wants. Failure to stop the
theft at the store, no different than failure to stop online theft in
the record business, will soon lead to failure of the business
entirely. The time for action is now.
Please read my article in Billboard Magazine below.
of Copyrights - COPYRIGHT D-Day Billboard February 09
Wallace Collins is a New York lawyer practicing in the
entertainment and intellectual property law areas. He was a recording
artist for Epic Records before attending Fordham Law School.
T:(212)661-3656 / www.wallacecollins.com
Specializing in Entertainment Law & Intellectual Property Matters
Wallace E. J. Collins III, Esq.
250 East 39th St. (Suite 9K)
New York, New York 10016
Tel: 212 661-3656
Email: Wallace Collins
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