Murray Digs In

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.

….Of concern in the BMG announcement [of new streamlined and simplified contracts] is their stated interest in participating in “additional revenue streams”. An example of this new trend is the recently reported Robbie Williams contract with EMI, wherein they will participate in revenue streams other than records like music publishing, concerts and merchandising. While each artist and record company are free to make whatever arrangement they wish, it should be clear that artists should not have to sell interests in additional revenue streams in order to get the industry to provide fair and transparent contracts.

This industry should not revert back to the old practice of demanding interests in the artist’s management, publishing and merchandising as a condition of obtaining a record contract. That would truly be a backward move toward indentured servitude. [see American Idol contracts]

Murray is no radical and hopes to see the labels and artists patch things up on their own, but he also makes it clear upon whom it is most incumbent to change – now.