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The Revolution Continues

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No – not in Iraq, with the major labels, forced to compromise in all directions:

    Meeting with legislators behind closed doors in Sacramento, Warner Music Group officials on Wednesday disclosed an overhaul of its royalty accounting process — a move the company hopes will quell mounting claims that record labels shortchange artists.

    The action comes as California lawmakers consider a bill to address questionable accounting practices in the music industry. Introduced by state Sen. Kevin Murray (D-Culver City), the proposal follows hearings last year in which Don Henley, the Dixie Chicks, Sam Moore and other stars testified that labels cheated them out of royalties by obfuscating earnings.

    Warner, home to such acts as Lil’ Kim and Linkin Park, is the third major record firm to promise accounting reform.

    Bertelsmann Music Group and Universal Music Group announced similar changes in November, though both have been slow to implement their plans. Sony Music and EMI Group are the only major record corporations that have not jumped on the reform bandwagon.

    In private sessions Wednesday, Warner executives spent hours telling legislators from both parties about accounting practice changes they contend will put “teeth” into the company’s commitment to reporting accurate royalties.

    ….Warner is promising to go further than its rivals by paying interest at prime rates to artists on unpaid royalties found in an audit. In another first, it will reimburse acts for costs of any audit that reveals under-crediting of royalties exceeding 10%.

    The company also plans to pay artists a higher royalty for songs downloaded online, while scrapping archaic methods for calculating Internet sales.

    Despite promises to clean up its accounting, the industry remains embroiled in a bitter legal battle with some of the nation’s biggest soul stars, who have accused the Big Five of underpaying royalties for decades.

    Attorneys for Mary Wells, Jackie Wilson, Lester Chambers, Moore and others contend that the companies have failed to accurately report royalty earnings or to make required contributions to pension funds. In December, a federal judge in Atlanta sided with the artists and denied motions by the Big Five to dismiss their decade-old suit. [LA Times]

They sure as hell aren’t making the changes out of the goodness of their collective hearts. The squeeze coming from digital downloads, legal and legislative action is forcing them to places they should have gone on their own – kind of like AOL now offering much better value and customer service now that business is in the crapper. MANY of us are learning that PREEMPTIVE ACTION is much preferable to waiting around blithely for calamity to descend.

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About Eric Olsen

  • http://www.foliage.com/~marks Mark Saleski

    there signs that the industry is coming around in other areas as well. i cracked open the latest Stereophile last night and the Industry Update section had quite a bit of material about how folks are beginning to admit that downloading may in fact be helping sales of cds.

    who woulda thunk it?