California State Senator Kevin Murray has an absolutely fascinating and comprehensive summary of what he has gathered from the three California Senate Select Committee on the Entertainment Industry hearings on recording industry practices, which he has chaired. The man is meticulous and the summary is quite long, but here are some highlights.
Regarding record label royalty payments:
- When confronted by the accusations from auditors that all royalty statements under reported royalties due to the artists, representatives from all five major record conglomerates denied any wrongdoing. I was reminded of the tobacco executives standing in front of Congress and swearing that they did not believe tobacco was harmful to one's health.
On the artist/label relationship:
- Aside from the merits of the various issues, which will be discussed here, one of the most significant issues from the artist perspective is trust. The RIAA has become expert at the late night amendment and at managing the legislative process to their benefit. Normally this is considered a good trait for a trade association. In cases where there is a clear separation of interests, like pro-choice vs. anti-choice, pro-gun vs. anti-gun, this behavior is necessary for survival. To the victor go the spoils. However, in the case of artist related issues, the artists and the record companies are supposed to be allies and partners. It is as if one spouse began secretly moving assets in order to benefit him or herself to the detriment of the other spouse. Upon discovery, it is bound to generate resentment, anger and possibly revolt.
There are actually two ongoing issues upon which the artists and the companies fundamentally disagree: the Seven Year Rule and Accounting Practices. Once these two issues are solved, artist and record companies can join together to fight their mutual enemies.
They can invade Iraq.
Conclusions:
- I urge the record companies to consider the structural and accounting changes on their own to avoid legislative that would mandate contract terms and to engage in discussions with State Legislatures and Congress about enacting those suggestions that require legislative action.
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