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.
Reversion 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)
Email: Wallace Collins
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